The introduction of the National Childcare Scheme (NCS) was a landmark moment for making high quality childcare more affordable and accessible to families in Ireland. It entails a fundamental shift away from subsidies grounded in social protection entitlements, and towards a comprehensive and progressive system of universal and income-based subsidies.
The objectives of the pioneering Scheme, which form the rationale behind the underlying funding model, are to improve outcomes for children, reduce poverty, have a positive impact on gender equality in relation to labour market participation, tangibly reduce the cost of childcare for thousands of families, and establish a sustainable platform for investment in the Irish childcare sector for decades to come.
The universal subsidy is available to all families with children aged between 24 weeks and 36 months (or until the child qualifies for the Early Childhood Care and Education programme if later). The universal subsidy is based on the child’s age, and not on income. Parents do not have to undergo an assessment to avail of this subsidy. The subsidy currently provides 50c per hour towards the cost of a registered childcare place up to a maximum of 45 hours a week.
To increase the cost to €1 per hour would cost approximately €18m. To increase the cost to €1.50 per hour would cost approximately 37m.
The funding model of the NCS is based on key assumptions around the preferences and behaviours of parents relating to working hours and childcare choice, rates of growth in demand, and certain metrics are extrapolated from available data. As such, all estimates remain heavily caveated insofar as the scheme represents a considerable departure from legacy schemes and this renders estimates inherently challenging.
It is particularly difficult to estimate increases to the universal subsidy in regard to the 2019 figures, as there is insufficient data to consider due to the NCS launching in November 2019, and the suspension of the NCS for 3 months from April 2020 to June 2020 due to the Covid-19 pandemic.
Notwithstanding this, my Department is fully committed to the success of the NCS in benefiting families across Ireland, and envisage its further growth into 2021 as families make greater use of childcare services as we recover from the impact of Covid-19.