Dáil Éireann Debate, Tuesday - 5 November 2024
961. Deputy Jim O'Callaghan asked the Minister for Children, Equality, Disability, Integration and Youth the estimated full year cost of reducing the maximum cost of childcare to €500 per family per month. [44911/24]
View answerThis question requests the cost of reducing childcare fees so that families pay no more than €500 per month.
The NCS Universal Subsidy is available to all families with children under 15 years old. This subsidy is not means tested and provides €2.14 per hour towards the cost of a registered childcare place for a maximum of 45 hours per week.
This Department does not hold individualised fee data for parents as these are local agreements between parents and providers; instead a reduction in the average cost of ELC to parents is examined. To estimate these costs, data from Pobal on average weekly fees across the country was used.
The NCS is not currently designed to apply subsidies at family level and it is necessary to make some assumptions to support such a model. To ensure a cap of €500 per month for all families, data from Pobal on the number of children per family availing of the NCS was used. The first or only child in a family had their fees capped at €500 euro per month.
Under the current NCS universal subsidy and based on the national average fee for full time childcare, families currently do not pay more than €500 per month for a single child. Because of this, the additional cost of this change is as a result of children that are not the first or only child claiming NCS in their family. These children had their universal subsidy set to the average weekly fee, which will theoretically cover their entire fee for full-time provision when averaged nationally. The universal subsidy for the first children in these multiple children families were adjusted down to reflect the €500 cap.
As these costings are based on an average fee, the impact of this change would vary based on the level of fees within the services, patterns of usage and age of the child. The below estimate has been costed such that all families will have their costs reduced to at least €500 per month, in some cases the reduction will be greater.
The ESRI SWITCH model was then used to estimate the quantum of this change and applied to the Departments baseline cost of the NCS. The full year cost of this change was estimated at €82.64m.
This estimate comes with a number of caveats, from September 2024 a number of enhancements were made to the NCS, the estimates factor in these changes:
Increase in universal subsidy from €1.40 to €2.14.
Extension of NCS to families availing of childminders.
Increase in NCS sponsor subsidy to €5.30 per hour for all children over the age of 1.
The impact of these changes are yet to be determined and carry a risk of altering the above costings due to increased participation of childminders for example. As such extensions to the scheme are based on estimates.
As has been referenced previously the above costing is based on an average fee, the Department is aware of significant variation in fees but without enough information must use an average. The distribution of costs for first/only children versus additional children is based on current Pobal data, if this distribution were to change through increased NCS participation or more children per family availing of the NCS this cost would increase significantly.
Finally, this costing is made on the basis of a static system; that is, the model assumes that the level of usage of eligible ELC does not increase or decrease but remains static. Any changes to subsidies may create a change in behaviour of families, for example, return to/increased labour force participation and use of formal ELC for the first time.
