The National Childcare Scheme will greatly increase the number of families who can access financial support, with some families receiving subsidies for the first time. This is because the Scheme removes many of the restrictive eligibility requirements of the existing support programmes, whereby a parent must be in receipt of certain Social Protection payments or a Medical Card in order to receive targeted supports. In this way, it aims to combat the poverty traps which may exist within the existing schemes.
Income thresholds for assessment under the Scheme were raised substantially under Budget 2019. The significant increase in the Scheme's maximum net income threshold from €47,000 to €60,000
per annum, ensures that families with, in some cases, a gross income of up to €100,000 will benefit from the Scheme.
I am also very pleased that I have managed to adjust the lower income threshold, meaning that maximum subsidy rates will now be paid to all families with a reckonable income of up to €26,000 (up from €22,700). This ‘poverty proofs’ the Scheme by ensuring that families at or below the relative income poverty line will benefit from the very highest subsidy rates under the scheme.
I would emphasise that this Scheme is designed in accordance with the principle of progressive universalism, having regard to the best interests of children and to the needs of the most economically vulnerable. Those with the least income will get the highest subsidy. We will also aim to support education, training and employment as routes out of poverty.
It is estimated that 36,050 households with children in childcare will not be eligible for income assessed subsidy under the national childcare scheme due to their reckonable income exceeding the threshold of €60,000.
This figure is arrived at taking account of
- Extrapolated 2016 household income distributions for families with 1, 2, and 3+ children
- The estimated number of children at different ages/stages of education
- The estimated uptake of those children based on patterns at their age/stage of education
- The behavioural patterns of parents in the upper/lower half of the income distribution.
However, of these 36,050 households, it is estimated that 13,200 will qualify for a universal subsidy of up to €1,040 per annum as they will have children under three or not yet eligible for the ECCE scheme. A further 14,000 approximately will qualify for the free pre-school programme (ECCE) which is considered to reduce childcare costs for parents who are working by approximately €5,500 per child over the course of the 2 year ECCE programme.
Finally, it is should be noted that the National Childcare Scheme is designed to be flexible, with income thresholds, subsidy rates and maximum hours and these can be adjusted over time as Government investment becomes available.