Wednesday, 22 September 2021

Questions (146)

Jennifer Whitmore


146. Deputy Jennifer Whitmore asked the Minister for Children, Equality, Disability, Integration and Youth if he will address the anomaly whereby parents who do not work or study cannot access the national childcare subsidy for after-school care during term-time; if he has carried out a poverty impact analysis on the new national childcare scheme; and if he will make a statement on the matter. [45730/21]

View answer

Written answers (Question to Children)

The National Childcare Scheme provides financial support to help parents to meet the cost of childcare and to support better outcomes for children. 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.

The NCS is designed to be highly inclusive and to meet the needs of those families who need it the most. The NCS is based on the principle of progressive universalism and has regard to the best interests of children.

By making this fundamental shift away from the legacy schemes where subsidies are grounded in medical card and social protection entitlements, and by tangibly reducing the cost of quality childcare for thousands of families, the NCS aims to improve children’s outcomes, improve labour market participation and reduce child poverty. It is a central policy component of the NCS to poverty proof and assist people in exiting the poverty trap.

Within this framework, an income-related subsidy is payable for children up to 15 years of age. The subsidy level is determined by the family’s income and the child's age. The number of hours subsidised is determined by the parent's employment or education arrangements.

The scheme is also built to ensure that families are supported to access a minimum level of early learning and childcare provision to support positive child outcomes.

During term time, the child's development needs are generally met through school participation.

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 definition of work or study is broad, covering all forms of work or study arrangements: full-time, part-time, week-on/week-off and zero hour contracts. Moreover, the minimum hours required to engage in work or study to qualify for up to 45 hours per week is very low – at just two hours per week. In this way, the NCS encourages parents to exit poverty and deliver better outcomes for their children.

Underpinned by this approach is strong evidence that shows how growing up in poverty negatively impacts on child outcomes. Taking up work or engaging in training, even a very low number of hours, is key to enabling families to break that cycle and that is what the NCS is designed in part to support.

It also reflects the need to ensure that our systems recognise the critical role of family in children’s lives. Particularly where those families are available to care for their children.

Alleviation of poverty was at the heart of the development of the scheme. Much of the research concentrated on the direct impact it would have on low income households.

The 2016 policy paper which formed the basis for the National Childcare undertook an extensive analysis of the how the scheme would impact this in poverty and in low income households. It 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.

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 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.

Research by Melhuish et al. (2015) and Sylva et al (2004), in the NCS policy paper 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 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.

Whilst recognising these general principles, 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.

The DCEDIY is committed to keeping the scheme under review and to assess whether it is meeting its objectives. I have contracted Frontier Economics to undertake a review of the National Childcare Scheme in line with Section 26 of the Childcare Support Act.

Variations on the concept of a work/study test is widely used around the wold and I have also requested that Frontier review the usage and evidence of efficacy of this approach in other countries.

This work is due to be finalised in the final quarter of this year and will inform in an evidence based manner the future development of the scheme.