Dáil Éireann Debate, Tuesday - 9 May 2023
523. Deputy Kathleen Funchion asked the Minister for Children, Equality, Disability, Integration and Youth the additional cost of increasing the universal national childcare scheme subsidy by €1 and €2, in tabular form. [21050/23]
View answerThere are two types of subsidies available under the National Childcare Scheme:
• Universal Subsidies are available to all families with children under 15 years old. This subsidy is not means tested and provides €1.40 per hour towards the cost of a registered childcare place for a maximum of 45 hours per week.
• Income Assessed Subsidies are available to families with children aged between 24 weeks and 15 years. This subsidy is means tested and will be calculated based on your individual circumstances. Your rate will vary depending on your level of family income, your child’s age and educational stage, and the number of children in your family.
At Budget time I allocated a total of €358 million under the National Childcare Scheme (NCS) for 2023. This figure is based on an additional €121 million being made available as a result of the estimated full year costs of a number of amendments to the Scheme:
• The removal of the practice of deducting hours spent in school pre-school or school from overall NCS hours reward as of May 2022.
• The increase in the upper age eligibility for the NCS universal subsidy from 3 years to all children under 15 years as of August 2022.
• An increase in the NCS minimum subsidy from €0.50 to €1.40 as of 2nd January 2023.
Given the recent nature of these changes, full year data is not available on claimants under the Scheme on which to provide an exact cost for the Deputy's proposed change.
Using the ESRI SWITCH model, my officials have been able to simulate these increases in the NCS Universal Subsidy to generate a percentage increase in the full year costs of NCS for each change. These changes are then applied to the current expenditure estimates for 2023. The results are given in the below table.
Increasing the Universal Subsidy
|
Universal Subsidy per hour |
Percentage increase derived from SWITCH |
Cost of increase based on application to cost estimate at time of Budget 2023 (€358m) |
|
€2.40 (€1 increase) |
37.6% |
€134.6m |
|
€3.40 (€2 increase) |
75.2% |
€269.2m |
These estimates come with a number of caveats. Firstly, It should be noted that the minimum rate of the NCS income assessed subsidy also increases when increasing the universal subsidy. The ultimate impact of the changes from Budget 23 are yet to fully realised and as such extensions to the scheme are based on estimates. In addition, these costing are on the basis of a static system; that is, the model assumes that the level of usage of eligible early learning and childcare remains static. Any changes to subsidies may create a change in behaviours in families, for example, women returning to workforce and using formal early and childcare for the first time.
