Dáil Éireann Debate, Tuesday - 8 November 2016
41. Deputy Anne Rabbitte asked the Minister for Children and Youth Affairs her views on the lack of income progressivity in the universal child care subsidy announced in budget 2017; and her further views on whether the scheme is fair on households whose income falls just above the income threshold for the targeted childcare subsidy. [33338/16]
View answerIn line with the principle of progressive universalism, the new Affordable Childcare Scheme will encompass both universal and targeted elements which can be incrementally expanded over time. International evidence indicates that systems based on universalism are associated with lower rates of child poverty and deliver better outcomes for all children, with disadvantaged children benefitting more when services are provided within a universal programme design. Progressive universalism further recognises the importance of the provision of additional support to those with the greatest need.
The new scheme is highly progressive overall, with eligibility based on net parental income and the highest levels of support offered to those on the lowest incomes. It is more equitable and accessible than the current targeted subsidy programmes, under which many low-income families are not currently able to access subsidised childcare because of the requirement to be in receipt of certain state benefits or attending certain training programmes. It will also enhance affordability, offering greater levels of support overall to low income families than the current targeted schemes. For example, a person in receipt of the maximum level of subsidy under the current Community Childcare Scheme (by far the largest of the current targeted schemes) might face a weekly co-payment of €89 per week. Under the new scheme, a person in receipt of the maximum rate of subsidy might be expected to face an average weekly co-payment of €12 per week.
The universal subsidy for children under 3 recognises the fact that the cost of childcare is generally highest when children are under 3 years of age and this cost can push many parents out of the labour market when paid maternity leave ends. This higher cost is due to both the hours of care required (i.e. notably longer than afterschool care needs) and the underlying cost of providing quality childcare for very young children. Recent reports also suggest that cost and sustainability issues are affecting the availability of childcare places for children under 3 years. The Government commitment to provide a universal subsidy for this age cohort, as well as to provide higher rates of targeted subsidy, recognises and responds to these issues.
Finally, the Deputy has also asked about families above the income cut-off for targeted subsidies. Of course, all targeted schemes, by their nature, have thresholds and cut-off points. However, the new Affordable Childcare Scheme is designed to be flexible, with the ability to adjust income thresholds, subsidy rates and income taper rates, over time and as further Government investment becomes available.
