I propose to take Questions Nos. 172 and 173 together.
The recommendations of an Expert Group on a new funding model for Early Learning and Care and School-Age Childcare (ELC and SAC) were adopted by Government in December. The new funding model marks a new departure in State funding of the sector and is a significant step towards ensuring high-quality, affordable, sustainable and accessible services.
Budget 2022 has ensured an additional €78m for ELC and SAC, which will support my Department to introduce a range of new measures in the upcoming year. The Expert Group report informed this package of measures for the sector. The report emphasises the importance of a unified approach across the sector – both Early Learning and Care and School-Age Childcare – and this will be applied in the new funding model.
Among these measures are reforms to the National Childcare Scheme (NCS), which will be of significant benefit to many parents.
Specifically, the practice of deducting hours spent in the Early Childhood Care and Education (ECCE) programme or school from the entitlement to NCS subsidised hours will be discontinued in 2022.
Where both parents in a household are in work or study, eligible families can receive a subsidy for up to 45 hours per week and, for households where a parent is not in work or study, they can receive up to 20 hours per week of subsidy. Currently, where a child is in ECCE or school, these hours are subtracted from their entitlement to NCS subsidised hours.
With the change announced in Budget 2022, parents will be able to avail of all NCS subsidised hours regardless of time spent in school or ECCE.
It is anticipated that this will benefit an estimated 5,000 children from low-income families.
Additionally, the NCS universal subsidy will be extended to all families with children under 15 years of age. This is a significant expansion of the NCS, as currently the universal subsidy is available to children between the ages of 24 weeks and 36 months, and is payable for a child who is older than 36 months but does not yet qualify for ECCE. The extension of the universal subsidy will benefit up to 40,000 children.
These changes to the NCS were will increase the overall number of subsidised hours available to families with school-aged children, and may make SAC a more attractive option for parents.
Additionally, a new Core Funding stream will operate from September 2022 to support improved quality, affordability, and sustainability. Core Funding will be available to registered ELC and SAC providers, including full day care providers, ECCE-only providers, and stand-alone school-age providers, subject to the service agreeing to come into contract for the scheme.
The new Core Funding stream for both ELC and SAC services to support improved quality, affordability, and sustainability and the establishment of an Employment Regulation Order, will be worth up to €69 million in 2022 and up to €207 million from 2023 on. Participation in Core Funding will require services not to increase fees to parents from the September 2021 rates.
The calculation of the value of Core Funding to an individual provider will be predominantly based on the level of capacity that they commit to offering during the contract period, meaning providers will have a stable income source based on the service they deliver. The value of Core Funding to a provider will also depend on the qualifications of those working in the service.
Prior to the introduction of Core Funding, a Transition Fund will be available to ELC and SAC services from May to August inclusive, to support services during the period between the phasing out of the Employment Wage Subsidy Scheme (EWSS) in April and the introduction of the new Core Funding stream in September.
The Expert Group's report also addressed the role that ELC and SAC can play in contributing to tackling disadvantage and made a series of recommendations on how the funding model can support this goal through a combination of universal and targeted measures for services operating in the context of disadvantage.
Budget 2022 began the implementation of the Expert Group’s recommendations. Full implementation of all recommendations will be progressed in the coming years as additional funding is secured through the annual Estimates process.
I would also add that the Department oversees a Case Management process through which local City and County Childcare Committees (CCCs) and Pobal work together to assess and provide support to ELC and SAC services experiencing difficulties. This can include help with completing and interpreting analysis of staff ratios and cash flow, as well as more specialised advice and support appropriate to individual circumstances.
Financial supports, which may also be accessed through the Case Management process, are available for community services presenting with sustainability issues following a financial assessment by Pobal. All services who require support should contact their local CCC in the first instance.
