Tuesday, 9 April 2019

Questions (563)

Maureen O'Sullivan

Question:

563. Deputy Maureen O'Sullivan asked the Minister for Children and Youth Affairs the estimated first and full year cost of increasing the affordable childcare subsidy for children under three years of age by €1 per hour; and if she will make a statement on the matter. [16344/19]

View answer

Written answers (Question to Children)

The National Childcare Scheme will provide a universal subsidy of 50c per hour, up to a maximum of 40 hours per week, for all families with children under 3 years using registered early learning and care.  The universal subsidy is also available to families with children over three years who have not yet qualified for the free preschool programme (ECCE).  The tables below show the cost of increasing the universal subsidy from 50c per hour to €1.50 per hour, i.e. increasing the subsidy rate by €1. 

Due to the interplay between the universal and income-related aspects of the scheme, the cost estimates are arrived at by:    

- establishing the number of families with children under three years old (or over three but not qualifying for ECCE) by income bracket (2016 data supplied by CSO),

- profiling these families by reference to the age of their children,

- estimating the proportion of children in each income bracket and age range using registered early learning and care,

- calculating estimated subsidy rates based on income levels and age profile and

- applying estimates of the average hours used by age group for term time and non-term time.

The application of the subsidy at the existing levels (50c universal and the current targeted subsidy levels) assumes a level of dynamic change in terms of the numbers of beneficiaries.  This change is used at a fixed level throughout the estimates. In other words, increased subsidies may create behavioural changes by families which is not factored into the estimates below, for example, more families than expected may move from unregistered early learning and care services to registered services to avail of the higher level of subsidisation.

It should also be noted that the increase in the universal subsidy would benefit many children under three years who are in receipt of income-related subsidies.  This is because these children would now all receive a subsidy of at least €1.50 or higher per hour. 

Nov-Dec Cost (2019)

Universal Rate

€1.50

Additional Cost per annum

€7.17m

Full year cost (2020)

Universal Rate

€1.50

Additional Cost per annum

€43m