The National Childcare Scheme, once introduced in October 2019, will represent a major landmark for children and families in Ireland.
The new Scheme will ultimately replace the existing targeted childcare schemes with a single, streamlined and user-friendly scheme. It 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 improve children's outcomes, support lifelong learning, make work pay and reduce child poverty. It is also designed to have a positive impact on gender equality in relation to labour market participation and employment opportunities.
The National Childcare Scheme is scheduled to open in October, with payments flowing in November. In line with this timeframe, it is projected to cost €35m over the final two months of 2019, and to have a full-year cost of approximately €200m in 2020. These estimates include the cost of the significant enhancements which were agreed and announced as part of Budget 2019, including:
- increasing the Multiple Child Discount from €3,800 to €4,300 .
- increasing the minimum NET income threshold from €22,700 to €26,000,
- increasing the maximum NET income threshold from €47,500 to €60,000.
It should be noted that many of the families eligible for the Scheme already avail of childcare supports funded by my Department. To make the transition to the new National Childcare Scheme as smooth as possible, those families can choose to make the switch to the new Scheme in October or to remain on their current support for one final programme year. This may affect the National Childcare Scheme expenditure estimate.
In addition, the introduction of this new and innovative Scheme may impact parental choices with regard to childcare. While my Department's model takes account of this, it is based on the best available evidence-informed estimates which may need to be revisited after the Scheme launches.
The National Childcare Scheme has been designed to be flexible, with income thresholds, maximum hours and subsidy rates which can be adjusted in line with Government decisions and as more investment becomes available. As such, the Scheme will establish a sustainable platform for investment in early learning and care and school age childcare for years to come.