Dáil Éireann Debate, Thursday - 11 May 2017
3. Deputy Anne Rabbitte asked the Minister for Children and Youth Affairs her views on widespread forecasts that child care fees will increase in September 2017 as a result of increased demand under the single affordable childcare scheme, in view of the fact that up to 9,000 households that were initially promised targeted levels of subsidy will now receive the universal level of subsidy. [22523/17]
View answerI ask the Minister for Children and Youth Affairs her views on widespread forecasts that child care fees will increase in September 2017 as a result of increased demand under the single affordable childcare scheme in view of the fact that up to 9,000 households that were initially promised targeted levels of subsidy will now receive the universal level of subsidy.
I do not anticipate widespread increases in child care fees as a result of increases in subsidies this September. There is no evidence of plans to increase fee levels. Fees charged to parents are at the discretion of child care providers, who operate independently of the State. There are many factors that influence the fees charged, including a range of cost pressures and market forces. There are many reasons why a child care provider may raise its fees, in particular if child care fees have changed very little in recent years. While I do not expect a widespread increase in fees, my Department will actively monitor the trends over time.
The policy paper on the affordable childcare scheme, ACS, which the Government approved last October examined the option of imposing price caps on child care providers to prevent the erosion of subsidies through fee inflation. The policy paper noted that among the potential benefits of price caps would be preventing fee inflation and providing certainty for and equity between parents. However, it also noted problems that might arise. The introduction of price caps would represent economic regulation of the market. That would raise legal and economic questions as to what constitutes a fair price for child care. The policy paper recommended that there should be no initial price cap but the option of price caps should be considered following the independent review of costs and an examination of the initial market response to higher subsidies. The independent review to be commissioned later this year will include an examination of variation in costs and fees. It will be a key input into any future consideration of the potential benefits and risks of introducing price caps.
Estimates of take-up of the September 2017 measures suggest that up to 70,000 children will benefit from the improvements I am making. The fact that so many children will benefit from subsidies this September is a very positive development and represents a significant precursor to the affordable child care scheme when even more families will benefit. I am hopeful that the Bill on the affordable child care scheme will be published before the summer recess. I cannot guarantee this but we are working very hard to make this a reality before mid-July.
I thank the Minister for her response. The reason I asked the question, in light of the fact the scheme would be in before September 2017 and the fact that people were led to believe what their entitlements might have been, is that there will be a gap between the qualifications for certain families. There are approximately 9,000 families more or less who will not qualify but who will get the subsidy. Fees are not publicly displayed and are quite hard to get. There is no databases as to what the standard is throughout the country for fees. Given that there is so much talk about the sector around wages and the difficulties of recruitment and retention of staff in the sector, this might have been seen as an opportunity by some employers or crèches to pass it on directly to staff. My concern is around the numbers of people who will not be receiving anything other than the 50 cent per hour. If the subsidy is passed on directly to the staff then the parents would have the shortfall, leaving them worse off than they would have been in the previous year.
The Deputy highlights the point that not all families will receive subsidies. This, in itself, will be a factor that child care providers must take into account when setting their fees and in deciding to raise or not raise the fees.
The Deputy spoke of the numbers of families who may not benefit right away in September because we will not have the full affordable child care scheme that we had hoped and intended to have by then. We are estimating that it is possible that up to 9,000 children and their families may not be eligible for some subsidy this September, but these are families who are really closest to the threshold of the affordable child care scheme. It is, however, an estimate because it is impacted by fees and whether or not families choose to engage in the use of child care providers who are registered so they can access the subsidies. It must be stressed that the potential number of children and families in this regard is an estimate and we cannot be more precise in advance. We will monitor that, as I have indicated, for any possible chance of increase in fees.
This all hinges on when the ICT infrastructure is up and running - in 2018 or whenever the Minister can indicate that it will be up and running. Will those parents then be in a position to get payments backdated if there was a difference in the fees during the year? They have been disenfranchised in the 12 months from 2017 to 2018. I know they will receive the universal level of subsidy, but it was announced in Budget 2016. Will the Minister say if it will be backdated? If they thought they were going to be treated equally it would be a comfort for the parents. The 9,000 families I speak of, and the Minister has hinted at this, are in the gap between those who have the medical card and those who have the GP visit card. Is there going to be any retrospective payback for these families?
Most of those 9,000 families that may not benefit, and who we had anticipated could benefit, would have incomes that are near the maximum income threshold for the affordable child care scheme. They would have received low levels of subsidy under the affordable child care scheme. It is not possible to specify the precise income levels that may be affected as the means test for the GP visit card takes into account not just the family's income but also the amount the family spends on housing costs and child care costs and other expenses. Based on the HSE data on the typical family incomes of GP visit card holders it is estimated that on average this group may have received in the region of €12 per week subsidy. That is on the basis that they have full-time child care so it is not necessarily the case that everybody is going to lose that amount. What we will do in September 2017 is a massive improvement and a very big first step. I am not going to say "Never say never" to taking a look at the possibilities of the retrospective issue, but it is really important to accept and acknowledge that this is a huge leap forward and we are moving towards it. It is not just about getting the IT right: obviously we must pass the legislation also.
