I propose to take Questions Nos. 29 and 83 together.
The Programme for Government commits to introducing measures to substantially reduce the cost of Early Learning and Care (ELC) and School-Age Childcare (SAC) to parents. I have said previously that affordability of ELC and SAC for parents is a key priority, which we need to achieve alongside our continuing work to improve quality, sustainability and accessibility.
My Department is investing €638 million this year in the sector, with affordability for parents a key policy objective. As part of Budget 2022, I was pleased to announce that Government investment in ELC and SAC next year will reach €716 million.
My Department currently operates two major initiatives that support parents with the cost of ELC and SAC – the Early Childhood Care and Education (ECCE) programme and the National Childcare Scheme (NCS).
The universal ECCE programme provides two years of free pre-school for 15 hours per week, with more than 100,000 children benefiting each year.
The National Childcare Scheme provides universal and income-assessed subsidies to parents.
A universal subsidy for children up to three is available for up to 45 hours per week.
An income-assessed subsidy is available for children of all ages for up to 45 hours per week, the level of which is determined by the family’s income.
The NCS is designed to be highly inclusive and to meet the needs of those families who need it the most. The NCS is based on the principle of progressive universalism and has regard to the best interests of children.
Following Budget 2022, two significant reforms will be introduced to the operation of the National Childcare Scheme (NCS). It is intended that these reforms will make it possible for significantly more families to benefit from the NCS.
The first change is the discontinuation of the practice of deducting hours spent in ECCE or school from the entitlement to NCS subsidised hours from Spring 2022. With this change, parents will be able to avail of all NCS subsidised hours regardless of time spent in school or ECCE.
The second reform relates to the universal subsidy. This will be made available to all families with children up to the age of 15 from September 2022. Parents do not have to undergo an assessment to avail of this subsidy. The universal subsidy provides €0.50 cent per hour towards the cost of a registered place up to a maximum of 45 hours a week, which totals €1,170 per annum.
Furthermore, from September 2022, a major new Core Funding stream will be introduced. Under Core Funding providers will be supported in meeting their operating costs, including increased costs related to improved quality measures, in return for a commitment that fees to parents will not increase. The commitment not to increase fees will ensure that the full affordability benefits of the ECCE programme and the NCS are felt by parents.
€69 million is being made available for Core Funding next year, equivalent to €207 million in a full year. This is an estimated increase of 16% in the total annual income to the sector.
In advance of the introduction of Core Funding, a Transition Fund will be available to providers, also contingent on an agreement not to increase fees from September 2021 levels. This fund will operate between May and August 2022 between the end of the Employment Wage Subsidy Scheme (April 2022) and the introduction of Core Funding (September 2022).
This package marks the beginning of an important and transformative multi-annual investment programme. It achieves significant progress on the commitment to increase spending on ELC and SAC and will deliver substantial improvements in affordability, quality, inclusion and sustainability.