The National Childcare Scheme (NCS) is designed to improve the accessibility and affordability of quality childcare for families. In replacing the legacy schemes, 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 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.
In this way, the NCS aims to combat the poverty traps which may exist within the existing schemes, and to appropriately incentivise employment and education or training for parents, a policy objective that is known to benefit child and family outcomes.
With regard to income-based subsidies awarded under the Scheme, 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, or from September 2020, 45 hours per week). 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.
Where a parent is not engaging in work or study, the child will only be eligible for the standard number of hours of subsidy, that is 15 hours per week . From September 2020, this will increase to 20 hours. It is also important to note that the subsidy will only be payable during non-term time. This policy decision seeks to make the best use of finite investment for the highest number of families, to encourage labour market activation, to avoid poverty traps in some instances, and is also consistent with evidence on what is best for children. Research evidence supports shorter/part time hours in high quality Early Learning and Care services while school attendance also meets children’s development needs generally.
The extra hours available from September 2020 are targeted at supporting children whose parents are not in work or study, and also working families needing school age childcare. They also respond to concerns expressed by one parent groups.
It is important to note that the maximum subsidy rates compare very well overall with existing targeted scheme subsidy rates, while acknowledging that the schemes do not lend themselves to easy comparison.
The benefits of moving to an income-basis for eligibility include clarity, reduction of welfare traps, and equity. Eligibility criteria will now be on a single, clear basis, there will be increased support for progression into employment and retention in employment, and there will be equity in ensuring that low-income working families are not excluded from benefitting from subsidised childcare.
The new Scheme is based on the principle of progressive universalism – providing a level of support to all families while providing additional targeted support to families with lower incomes. As a result of this measure, all families will be able to take part in the NCS. This widens participation and removes any potential stigma that may attach to families who benefit from the Scheme, increasing the likelihood that all service providers will choose to participate.
There may be a small number of cases where a family who is currently receiving the maximum rate for full-time childcare under an existing programme may receive less under the National Childcare Scheme, particularly if their child is in school age childcare rather than full-time childcare. In such cases, the family can remain on their current payment in the transition period following the Scheme’s launch. I have committed to ensuring that no one loses out in the transition to the new scheme through the “saver” arrangements. This means that persons registered on the CCSP or TEC schemes before they close, and who retain their eligibility, will be able to remain on them indefinitely.
New applications for CCSP closed on 15th November, and applications to the TEC schemes will close from 14th February 2020. Parents using the saver arrangement can move over to the NCS at any point. The Parent Information line can help parents to understand which scheme will serve their family better.
I have also directed my officials to undertake research and analysis to examine any adjustments to the National Childcare Scheme which might be required to address unusual or anomalous cases, where this is the right thing to do to protect and benefit lower income parents. The scheme will be reviewed after 12 months and closely monitored thereafter to ascertain if it is meeting its stated objectives.
Finally, I would like to highlight that the new 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, any adjustments deemed necessary by Government can be carried out in a quick and responsive manner.