The start date for the Affordable Childcare Scheme (ACS) has not yet been confirmed. The procurement process for the external IT developer for the project is nearly complete, and when the developer is in place and has been able to validate the timeline for completion of the project, I will then announce the planned start date.
I have already publicly stated that the existing childcare schemes, including the benefits which were fast-tracked in September 2017, will remain in place for the programme-year starting this September. As the Deputy may be aware, these have been very successful and our target has been exceeded. Almost 77,000 children are now benefiting from these schemes; the target had been 70,000.
The most recent estimates for the full-year childcare costs of the ACS were presented in the Regulatory Impact Analysis, which was published in December 2017. The Regulatory Impact Analysis noted that there remains considerable uncertainty over the likely costs of the ACS, especially because of uncertainty about the scheme's impact on the demand for childcare.
According to the Regulatory Impact Analysis, if there is no increase in demand for childcare, then it is estimated that the full-year costs will lie between €127m and €149m. Taking into account potential increases in demand, international evidence suggests that the full-year cost of the scheme could rise to somewhere between €165m and €193m. However, such an impact on demand may only materialise fully over a period of several years, as parents begin to participate more in the labour market in response to improved access to affordable childcare. Increase in demand may also be caused by parents changing their childcare choices towards regulated childcare.
The introduction of the ACS will see a significant change in eligibility criteria for childcare subsidies. Whereas eligibility for childcare supports under the current schemes depends on possession of a Medical Card / GP Visit Card, or receipt of one of a range of social welfare payments, or participation in a relevant education or training course, the level of subsidy under the ACS will primarily depend on income. In addition, a universal subsidy was introduced in September 2017 for 6-36 month olds, which will remain in place under ACS.
I have no immediate plans for changes in ACS eligibility criteria, but the scheme has been designed to give flexibility to adjust both income-thresholds and subsidy-rates each year as part of the budgetary process. This ensures that the ACS can act as a sustainable platform for increasing investment in childcare in Ireland over the years ahead.
In line with the costings published in the Regulatory Impact Analysis, it is estimated that the number of beneficiaries of ACS on its introduction could rise to more than 82,000, but is likely in the first instance to be between 70,000 and 80,000, with the precise level depending on the impact on the demand for childcare. As income-thresholds and subsidy-rates are changed over time, the number of beneficiaries will change accordingly.
