I propose to take Questions Nos. 77 and 84 together.
Through the National Childcare Scheme 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. In designing the National Childcare Scheme, extensive research and consultations have been carried out to ensure that this goal is achieved and that the Scheme can help as many families as possible.
The National Childcare Scheme will greatly increase the number of families who can access financial support. The Scheme removes many of the restrictive eligibility requirements of the existing support programmes, whereby a parent must be in receipt of certain Social Protection payments or a Medical Card in order to receive targeted supports. In this way, it aims to combat the poverty traps which may exist within the existing schemes, and to make work pay for parents. Many parents will see an increase to the level of subsidy they currently receive.
By making this shift and by tangibly reducing the cost of quality childcare, 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 Scheme has already been enhanced to expand the benefits for working families. As part of Budget 2019, the income thresholds used for assessing the level of subsidy to which a parent may be entitled were raised.
The significant increase in the Scheme's maximum net income threshold from €47,000 to €60,000 per annum enables some families with a gross income of €100,000 to qualify for income-related subsidies. It means that an estimated 7,500 more children will benefit from the scheme relative to the original proposals. Over 40,000 other children, already eligible, will see increases to their subsidies.
I am also very pleased that I have managed to adjust the lower income threshold, meaning that maximum subsidy rates will now be paid to all families with a net annual income of up to €26,000 (up from €22,700). This ‘poverty proofs’ the Scheme by ensuring that families at or below the relative income poverty line will benefit from the very highest subsidy rates under the scheme. It will also make work pay for parents in employment or training as they will now be able to avail of help with their childcare costs.
Over the last four budgets, investment in childcare has risen by nearly 117%. However, I acknowledge that more investment will be needed. Historic under-investment in early learning and care has created a situation that has no quick solution. The new National Childcare Scheme will establish a sustainable platform to enable us to continue investing for years to come. The Scheme is designed to be flexible, allowing income thresholds, maximum hours and subsidy rates to be adjusted in line with Government decisions and as more investment becomes available.