The NCS is fairer and more far-reaching than many of the current targeted schemes. It removes many of the very restrictive eligibility requirements of the current schemes, linked to Social Protection payments or a Medical Card in order to receive supports. Moving to this new system will be a significant step forward in combating the poverty traps inherent in the current schemes.
Under the current targeted schemes, there are many families with low income-levels who are not currently able to access subsidised childcare, either because they are in low-paid employment or because they are rotating between short periods of employment, unemployment and training. The new Scheme will change this. Many parents will see an increase to the level of subsidy they currently receive, and many new families will benefit for the first time.
The OECD's 2017 Faces of Joblessness report compared the child care supports for lone parents previously available in Ireland with the expected impact of the National Childcare Scheme. It found significant improvement for lone parents. It found for example, that for certain lower paid lone parents working full time, the Scheme will bring net child care costs down from being the highest across the OECD, to 11th highest. Of course, this analysis was conducted before Budgets 2019 and 2020 which have since further enhanced the Scheme for lone parents and other groups.
Analysis of the impact of the new scheme conducted using the ESRI's SWITCH model indicated 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, with an effective average disposable income increase of €48 per week.
These findings reflect 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 is designed so that families who need the most support can receive it.
Parents who are working, studying or who meet certain other conditions will qualify for an enhanced-hours subsidy, up to a maximum of 40 hours per week (rising to 45 hours from September 2020). This supports a key objective of the scheme which is labour activation and in particular female labour activation. The definitions of ‘work’ and ‘study’ are set out in regulations made under the Childcare Support Act 2018 and are comprehensive, covering differing types of work and study arrangements, such as part-time, week on/ week off and zero hour contract arrangements. The legislation also provides for “bridging periods” when a parent is moving between work and study.
These inclusive arrangements will ensure that parents in a variety of work/study situations will be able to avail of the National Childcare Scheme.
Arrangements are in place to monitor the success of the National Childcare Scheme in meeting its objectives, and the Scheme has been designed to be flexible and responsive. Section 26 of the Childcare Support Act 2018 provides for a review of the operation of the scheme to commence 12 months after the first payment of subsidies under the scheme. A report of this review will be laid before each House of the Oireachtas. The stated policy intention of section 26 of the legislation was to ensure an early review of the Scheme to identify, in a timely way, any key issues or challenges which need to be addressed rapidly. A longer-term review will also be carried out after three years.
The Scheme also has a Monitoring and Evaluation Framework in place to support both ongoing and periodic assessment of the Scheme’s success in meeting its objectives, including its objectives in supporting labour market activation and female labour market activation. It sets out the measures which policy-makers will use to monitor the Scheme on a continual basis, as well as to evaluate the Scheme at regular intervals, through a system of regular reporting by Pobal to the Department.
Under Budget 2020, the existing “saver” arrangement was extended, to ensure that no one loses out in the initial transition to the new Scheme. In this Budget, additional funding was secured to extend the savers beyond August 2020. This means that persons who are registered on the CCS or TEC schemes before they close, and who retain their eligibility, will be able to remain on them indefinitely, for example, until they no longer require early learning and care or school age childcare.
This and the other changes announced as part of Budget 2020 reflect the underpinning design of the Scheme 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.