I wish to inform the Deputy that the maximum income threshold
ensures that some level of subsidy is awarded to all low income families making use of regulated childcare, through including all families within the bottom five income deciles (that is, 50% of the population). It also includes the very large majority of current scheme beneficiaries, while “saver” provisions will ensure that any current beneficiaries with higher income levels are not negatively affected in the immediate transition to the new scheme.
In setting the base and maximum income thresholds, a number of factors were considered such as the poverty line, income distribution, disincentive effects, continuity with current targeted childcare schemes, and cost and cost effectiveness.
When costing the scheme, it was estimated that increasing the maximum income threshold to €52,500 would increase the total yearly cost of the scheme to an estimated €158 million. In other words therefore increasing the total annual cost of the scheme by €800,000 for every increase of €500 in the maximum income threshold as per table.
|
|
Maximum Income Threshold
|
Total Cost for Year
|
|
Year 0
|
€47,500
|
€150,000,000
|
|
Year 1
|
€48,000
|
€150,800,000
|
|
Year 2
|
€48,500
|
€151,600,000
|
|
Year 3
|
€49,000
|
€152,400,000
|
|
Year 4
|
€49,500
|
€153,200.000
|
|
Year 5
|
€50,000
|
€154,000,000
|
