Dáil Éireann Debate, Tuesday - 1 March 2022
543. Deputy Jennifer Whitmore asked the Minister for Children, Equality, Disability, Integration and Youth if childcare services are able to increase their fees up to the end April 2022; if they do increase their fees in the meantime, if these fees will have to drop back down to September 2021 levels regardless of the amount at which the fees are currently set; and if he will make a statement on the matter. [11169/22]
View answerEnsuring affordability of Early Learning and Care (ELC) and School-Age Childcare (SAC) is a priority for me.
On 7 December, I was pleased to launch a report on a new funding model for ELC and SAC, Partnership for the Public Good: A New Funding Model for ELC and SAC. The recommendations in the report were accepted in full by Government.
The new funding model recommends a new approach to fee management. This will start with a requirement for providers to maintain fees at or below September 2021 levels to access new funding schemes in 2022.
Budget 2022 announced a series of measures to increase investment in ELC and SAC sector to €716 million this year, including a one-off Transition Fund and a major new Core Funding stream.
The Transition Fund will be available to ELC and SAC services from May to August inclusive, during the period between the ending of the Employment Wage Subsidy Scheme (EWSS) in April and the introduction of a new Core Funding stream in September.
The contractual requirement for fees to remain at or below September 2021 levels is planned to come into effect in May 2022 with the provision of Transition Funding. This will be followed in September 2022 with Core Funding which will also have a contractual requirement that fees are not greater than September 2021 levels.
The introduction of this requirement means that parents will not be faced with fee increases, and the full affordability effects of the NCS reforms announced in Budget 2022 can be fully realised.
Providers who have increased their fees above September 2021 levels will be required to revert to September 2021 levels before May 2022 to be eligible for the Transition Fund in May 2022. Similarly, to be eligible for the new Core Funding stream, providers who have increased their fees above September 2021 levels will be required to revert to September 2021 levels before September 2022.
Budget 2022 also confirmed that ELC and SAC employers will continue to benefit from the exemption to the turnover rule for the EWSS until April 2022, in part to avoid the additional costs arising from public health measures being passed on to parents.
The EWSS has been available to employers in the sector since August 2020. Enhanced EWSS rates (from October 2020-January 2022) amount to approximately €34 million per month for the sector, covering on average 80% of payroll costs and 50% of total operating costs for providers. Standard EWSS (from August 2020-October 2020 and for February 2022) amount to approximately €22 million per month for the sector, covering on average 50% of payroll costs and 38% of total operating costs for providers. A new EWSS flat rate of €100 that will apply from March-April 2022 will amount to approximately €11 million per month for the sector, covering on average, 25% staff costs or 11% total operating costs.
In advance of May 2022, given the level of investment being made available to the sector through EWSS, it is difficult to see any justification for an increase in fees at this time.
Sustainability Funding also continues to be available to providers where there are sustainability difficulties and I have requested that providers would exhaust this route before considering increases in fees for parents. I encourage providers to contact their local City/County Childcare Committee if they require any further information or support.
A Ready Reckoner to support services to determine the potential value of Core Funding will be available in early March along with further communications to the sector about the funding.
