My Speech on the Affordable Childcare Scheme:

As a percentage of wages, net childcare costs in Ireland are among the highest in the EU, the second highest for couples and the highest for single parents. We have a country specific recommendation from the European Commission to: Improve the provision of quality, affordable full-time childcare.

Childcare needs differ in every home. Parents want more choice and more affordable options. The cost of childcare is on the minds working parents – whether it’s worth going out to work or not.
The Growing up in Ireland Study – perhaps the most important piece of research ever undertaken in this country has now completed its first decade of work.
The Study included research on Parents’ Childcare Choices:
The data was collected in 2008 /2009 and showed that 23% and 50% of children aged 9 months, 3 years and 9 years received non-parental care. Parental care was favoured by the majority for all age groups (varied from 50 and 77%). Where parental care was not possible, the favoured option for babies was relative care, followed by a childminder, followed by centre-based care. Centre-based care was favoured over childminders for 3 year olds.

An additional source of data on parental choice is the CSO / QNHS. Although last data available is from 2007 – it showed that most parents, at that time, opted to have their children cared for by a parent. Of the 25% that did not, childcare from a relative was the favoured option. More parents opted for formal care than childminder care for their pre-school children and the reverse occurred for school age children.
Since 2007 however, child care costs have increased and with the intervening downturn – many middle-income parents in particular found child care an overwhelming financial burden.

As such I strongly welcome the inclusion of: The Affordable childcare scheme in Budget 2017 and acknowledge the vital role Minister Zappone has played to bring it to fruition.

The €19m in additional funding provided by the scheme will be added to the funding for the existing targeted schemes to give the overall budget for the new scheme. Available from September 2017, it will provide crucial financial support for parents towards the significant cost of childcare in this country.

This Affordable childcare scheme will replace the existing targeted childcare subsidisation schemes with a single, streamlined and more user-friendly scheme.

It will provide a system from which both universal and targeted subsidies can be provided towards the cost of childcare. In the case of targeted subsidies, these will be payable for children from 6 months of age up to 15 years of age. The level of subsidy will depend on the investment available and on a family’s income.

I believe the benefits of this new scheme are many including:

• Reduction of child poverty
• Enhancing affordability – providing both universal and targeted subsidies for parents towards their childcare costs.

• Encouraging labour market activation, through shifting the focus which has existed historically on linking childcare subsidisation to eligibility for social welfare benefits and medical card entitlement to income.

• Facilitating parental choice and improve access to affordable childcare through being open to all childcare providers registered with Tusla, including registered childminders.

• Provide a flexible platform for sustained investment in childcare in future years so that affordability can be further strengthened, while also providing a basis for quality improvements through supply-side funding of childcare services contributions and certain other allowable deductions.

The scheme will be open to all childcare providers who are registered with Tusla, including both centre-based childcare providers namely: crèches, preschools and day care centres in addition to child-minders.

Crucially this scheme is a national scheme and will be open to all childcare providers who are registered with Tusla. Participation in the Scheme, by childcare providers, will be voluntary and the choice of childcare provider will be up to the parent, subject to the provider participating in the Scheme. Local City and County Childcare Committees will be able to help parents find local childcare providers who are participating in the scheme. It is expected that the 900 community / not for profit services currently in existence will register for the scheme in addition to a large percentage of private providers.

It would be my hope that, over time, more child-minders will be encouraged and supported to become registered and to participate in the new scheme. Currently only a small percentage of child-minders are registered.
The Programme for Government is committed to the introduction of a robust model for subsidised high quality childcare for children aged 9- 36 months. At present, paid maternity leave in Ireland extends to 26 weeks or about six months, although the Programme for Government commits to further increasing paid parental leave in the first year of life. In line with current leave entitlements, the universal subsidy will be available from six months of age. This approach recognises that the cost of childcare can push many parents out of the labour market when paid leave ends. Indeed, the gap between the end of paid leave and the start of an entitlement to early care and education is an international indicator used to examine national policies in this area.

I believe this provides a much needed and long awaited break for squeezed middle-income families who may have previously just missed out on several other family assistance schemes due to means test eligibility grounds

Regarding Targeted childcare subsidies – eligibility for these subsidies will be based on net parental income. For parents with net incomes up to €22,700 per annum, the maximum rate of childcare subsidy will be payable.

The rate of subsidy will taper downwards as net income rises and will be capped at €47,500.

The income thresholds increase where there is more than one child in a family, so a family with two children under 15 years of age would have a maximum net income threshold of €51,300 and a family with three children under 15 years would have a maximum net income threshold of €55,100.

The maximum subsidy per hour will depend on the age of the child and the net income of the parents but will range from €5.38 for a baby under 12 months to €3.96 for a school age child.

I believe this is equitable and fair – providing much needed free child care for low and medium income families up to the age of 15.

Regarding the issue of informal care from grandparents and neighbours -it is vital that the value of the work they do is recognised. However, for the State to subsidise children’s care, there exists a need to know where the children are and who the childminders are. It’s a responsibility on the part of the State and as such childminders in this situation will need to register with Tusla first if they are to benefit.

The Affordable Childcare Scheme will also create a flexible platform for future investment in childcare funding supports, allowing subsidies to be expanded to more children and families over time.

So what does this Budget increase mean generally for the Early Years Sector?
The €121.5m increase in Budget 2017 for Early Years increases investment from €345m per annum to €466.5m, an increase of 35%. This represents an additional €86m for the full year 2017 costs of the extension of ECCE, the further roll out of the Access and Inclusion Model (AIM) within ECCE and, €35.5 for further measures to address affordability and quality.

How does Ireland’s early years spending now compare with other countries? :
Including the spend on infant classes in primary schools, total early years spending in Ireland post-Budget 2017 will be 0.55% GDP using 2014 GDP figures, an increase on this year’s 0.5% GDP figure. For the first time, total early years spending (including spending on infant classes in primary schools) will now exceed €1 billion per year.
Whilst this represents great progress- however there has been some criticisms of the scheme by a number of child care providers and crèche owners, who say they are not benefitting in any way. They have pointed out that the scheme should have included a subsidy for providers to ensure the quality of the child care is of a high standard. I believe they may have a point in this regard and additional funding to assist child care providers to ensure quality should be considered as a matter of priority.
There has also been some objections from stay at home parents who choose to keep their children at home who claim they are not being valued to same degree as childcare providers. Although there is a provision in this scheme to increase their tax credit by €100 raising it to €1100 in total – perhaps this point should be examined further.
In Conclusion this budget builds on universal progress made to date. The universal aspect is to help parents who want or need to go back to work or education. It bridges the gap – an expensive time – from the end of maternity leave to the start of the Free Pre-school year (6month -3yrs) For example for a couple with a child in full time creche or with a registered childminder it will work out at €960 per year saving.

It builds on last month’s introduction of the second Free Pre-School year is saving parents on average €4,000 per child – the number of children benefitting from the extension is going from 67,000 to around 127,000 . It also builds on the introduction of two weeks Paternity Leave for new fathers and Free GP care for under 6s . Parents of over 435,000 children now have the reassurance that they can bring their children to the doctor without having to pay for each appointment.

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