The basis for the design of the National Childcare Scheme is provided in the 2016 Policy Paper on the Development of a new Single Affordable Childcare Scheme, previously published and made available to the Deputy. This informed the Childcare Support Act which was debated and progressed through both Houses of the Oireachtas in 2018. The Oireachtas Committee on Children and Youth Affairs also led very helpful discussion on the objectives and merit of the proposed scheme.
Better outcomes for children is the primary objective both in the 2016 policy paper and the scheme design. The schemes objectives are to promote (i) a reduction in child poverty, (ii) positive child development outcomes, (iii) labour market activation and (iv) improved quality. These objectives are inherently interrelated and sustain each other.
The policy was informed by national and international evidence and advocacy on measures to prevent poverty (including inter-generational poverty). The policy sought to strike the right balance between enabling early learning and care services, or indeed school age childcare services, to meet the needs of children in terms of their positive development, and, tackling a significant contributor to poverty and poorer outcomes for children that of non-work households.
There is strong evidence that growing up in poverty has negative impacts on child outcomes. For example, according to the ESRI study Understanding Childhood Deprivation in Ireland (Watson et al., 2012), the longer-term impacts of poverty among children include lower levels of educational achievement, emotional and behavioural problems, and poorer health outcomes.
The research evidence suggests that parental employment is a key factor in protecting children from poverty and deprivation. The ESRI / Watson study concluded that parental unemployment is a significant risk factor in determining deprivation rates among children, with particularly high deprivation rates where a parent has never worked, or in lone parent households, or where the mother has no educational qualifications.
Childcare costs in Ireland (prior to the NCS) have been found to be a significant factor in contributing to low levels of participation in employment, education and training for mothers, particularly for lone parents. The NCS makes childcare much more affordable, and in some instances free to parents.
The NCS policy paper highlighted the dangers of poverty traps in childcare schemes, particularly where there is a risk of steep rises in childcare costs where a parent returns to work. Such traps undermine the incentive to take-up or increase employment. Therefore the NCS was designed to counteract this disincentive effect, through a smooth taper rate across the income assessed subsidies, and also through a transition from unemployment to work/study which increases the number of hours available.
Also referenced in the NCS policy paper is research by Melhuish et al. (2015) and Sylva et al. (2004), which indicates that positive children’s outcomes are for the most part met through part-time participation. This research has been used internationally in the design of various interventions. (DCEDIY is extremely grateful to have one of those authors, Prof Melhuish from Oxford University, on the Funding Model Expert Group.)
Melhuish and Sylva's research points to the fact that young children do not need to be in early learning and care for full time hours to meet their child development needs. As such, many schemes around the world are based on 15 to 20 hours per week. In Ireland's case, the State is now providing two years of free pre-school to all children before they start school for 15 hours per week. The NCS provides 20 hours of subsidised early learning and care per week where a parent is available at home, for children aged from six months, or 20 hours of school age childcare in non- term/ non ECCE time.
The OECD’s 2017 study Faces of Joblessness in Ireland, which included an ex ante analysis of the impact of the National Childcare Scheme, stressed the impact of work incentives on joblessness. It reported positively on the likely impact of the NCS. The study noted
For those with low earnings…who need to purchase childcare in order to work full time, a large proportion of potential earnings would be lost to higher taxes, withdrawn benefits or childcare costs…. A new childcare support scheme will be introduced shortly to provide subsidies to lower-income families where both adults work. This scheme will strengthen work incentives for those in low-income families, particularly for lone parents with lower earnings…
Dominic Richardson and Jonathan Bradshaw in Family Orientated Anti-Poverty Measures in Developed Countries note that:
Children in families with low work intensity have a much higher risk of
income poverty – an unsurprising finding given the important role of employment
and earned income in the protection from income poverty. For both income
poverty and deprivation, low work intensity presents the highest risk factor of all.
With the exception of Bulgaria, Greece and Romania child deprivation rates are
at least double the average in families with adults working very little.
Households on incomes of less than €26,000 NET can access full subsidies of up to €225 per child, per week, covering up to 45 hours week. To access 45 hours rather than 20 hours, the parent must be in some type of employment or be engaged in training. The training can be as little as 2 hours per week on a recognised Level 1 NFQ course. In this way, the NCS encourages parents to exit poverty and deliver better outcomes for their children.
For children living in exceptional circumstances of disadvantage or need, the NCS sponsorship arrangement is designed so that they can access free early learning and care or school age childcare for longer or full time hours where required. More information is available on NCS.gov.ie
The DCEDIY is committed to keeping the scheme under review and to assess whether it is meeting its objectives. A 12 month review will begin shortly.
