The National Childcare Scheme is a new, national scheme of financial support to help parents with the cost of quality childcare. It will ultimately replace all previous targeted early learning and care and school age childcare programmes with a single, streamlined and user-friendly scheme, providing both universal and targeted subsidies. The development of this scheme is a significant move forward in delivering quality, accessible, affordable Early Learning and Care and School Age Childcare to families throughout Ireland. It will be introduced this October, with payments flowing from November.
Through the NCS and a range of other measures, I am committed to changing Ireland’s childcare system from one of the most expensive in the world to one of the very best. When the Scheme is introduced, many families will become eligible for early learning and care and school age childcare subsidies for the first time and many more families will qualify for increased levels of subsidy. The Scheme also provides a vital platform for future investment in the sector.
The Scheme entails a fundamental shift away from subsidies grounded in medical card and social protection entitlements, and towards a comprehensive and progressive system of universal and income-based subsidies. By making this shift and by tangibly reducing the cost of quality childcare for thousands of families across Ireland, the Scheme aims to radically improve access to quality childcare, improve children's outcomes, support lifelong learning, make work pay and reduce child poverty.
Targeted subsidies will be available for families with NET annual incomes up to €60,000 whose children are between 6 months and 15 years old and who are availing of registered childcare. A net income of €60,000 could mean a gross household income of up to €100,000 per annum and hence the NCS will capture families that might be considered middle income earners. This maximum net income threshold was significantly increased in Budget 2019 from €47,000 to €60,000 per annum, meaning that an estimated 7,500 more children will benefit from the scheme relative to the original proposals. Over 40,000 other children, already eligible for the scheme, will see increases to their subsidies. This is a significant positive change which will benefit middle-income families.
Parents who do not qualify for an income-related subsidy under the National Childcare Scheme may qualify for a universal subsidy instead. The universal subsidy is available to all families with children under three years, and to families with children over three years who have not yet qualified for the free preschool programme. This subsidy provides 50c per hour towards the cost of a registered childcare place for up to a maximum of 40 hours per week and equates to €1040 per annum for a child utilising full time registered early learning and care.
Importantly, the new Scheme has been designed flexibly with income thresholds and subsidy rates which can be adjusted incrementally over time as Government investment becomes available.
In September and October, the Department of Children and Youth Affairs will run a large information campaign across a number of media channels to ensure there is full awareness amongst parents of their potential entitlements under the new Scheme. This campaign will advise parents how they can avail of the Scheme and the levels of subsidy to which they may be entitled.
The Deputy may also be aware that I have recently expanded the ECCE pre-school programme. When introduced in 2010, ECCE provided one academic year of pre-school free of charge to children. This has now been extended to two years. Estimates suggest that working parents availing of the full two years may save €5,700 approximately on their early learning and care costs.
Finally, First 5, the recently published Whole of Government Strategy for Babies, Young Children and their Families commits to doubling investment in early learning and care and school age childcare over the next 10 years. This is on top of the 117% increase in investment we have seen over the last 4 years. Both these facts demonstrate the commitment of this Government to making early learning and care and school age childcare more affordable for parents, including middle income earners.