The National Childcare Scheme (NCS) has two types of subsides:
A universal subsidy is payable for children between the ages of 24 weeks and 36 months (or until the child qualifies for the Early Childhood Care and Education programme if later) who are availing of childcare services from an approved childcare service provider or childminder. The universal subsidy is not means-tested and provides 50c per hour towards the cost of a registered childcare place for up to a maximum of 40 hours per week.
An income-related subsidy is payable for children from 24 weeks to 15 years of age who are availing of childcare services from an approved childcare service provider or childminder. The level of subsidy payable is determined by the family’s reckonable income (i.e. gross income minus tax, PRSI and other deductibles and minus any applicable multiple child discount).
Many parents availing of current targeted early learning and care and school age childcare schemes will be better off under the new NCS and able to access higher levels of subsidisation. Many others will qualify for financial support for the first time.
The OECD's 2017 'Faces of Joblessness' report compared the childcare supports for lone parents previously available in Ireland with the expected impact of the NCS. The report found significant improvements for lone parents, for example, that for certain lower paid lone parents working full time, the Scheme will bring net childcare costs down from the highest across the OECD, to 11th highest.
Further, analysis of the impact of the new scheme conducted using the ESRI's SWITCH model indicates that, on average, the boost to disposable income by the NCS will be larger for one-parent families than for couples, reflecting the typically lower income profile of one-parent families. Employed lone parents are the family type which will experience the greatest gains.
These findings reflects the very considerable work undertaken to poverty-proof the NCS by ensuring that families at or below the relative income poverty line will benefit from the highest subsidy rates.
The Scheme also removes many of the current restrictive eligibility requirements linked to Social Protection payments or a Medical Card. In this way, the Scheme aims to combat poverty traps and to make work pay for parents.
Arrangements are in place to ensure that no one loses out in the initial transition to the new Scheme. Families can continue to access their current targeted supports, remaining on their current payment, until the end of August 2020. In addition, my officials are undertaking further analysis to identify if any refinements are required to the NCS in order to ensure that it fully achieves its aim to deliver quality, accessible, affordable childcare for families in Ireland. This analysis is currently informing some of the Department's priorities for the Estimates / Budget 2020 process.
The Department is also committed to a review of the Scheme 12 months after the first subsidy payments begin.