How parents can cut looming costs of childcare

Parenting while working from home in a pandemic has been fun. But with any luck, this 18-week long play date is coming to an end, as children return to childcare and to school.

The shutdown, of creches, preschools and schools hasn’t been ideal for anyone. But parents who temporarily stopped paying childcare costs were reminded of just what a dent in disposable income it is.

Fees for full-time childcare exceed €184 a week, with Dublin and surrounding counties averaging over €200 per week, according to Government-funded organisation Pobal. This is despite a pay and conditions crisis in the sector.

The cost of childcare in other EU countries is substantially less. In Finland, Denmark, Belgium and France, weekly full-time fees range between €60 and €70 per week with Sweden as low as €30.

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As children get older, working parents may pay for someone to do the school run, for breakfast and after school clubs, camps, childminders, au pairs, or an unstable Jenga tower of all of these.

Until the Government does more, the coordination and cost of childcare is a puzzle each family has to solve for themselves. In the meantime, knowing the financial supports available can help your pocket.

Free pre-school years

If your child turns three this year, some respite from childcare costs is in sight from this September. The Early Childhood Care and Education (ECCE) scheme provides three hours of free pre-school education for two years until primary school. The State pays the preschool directly.

Where a school offers extra hours, like a later 2pm pick-up for example, the parent pays. If you don’t want to pay for extra hours, choose a provider accordingly.

Come summer, you are on your own however. "That's something that can shock parents," says Frances Byrne, director of policy and advocacy at Early Childhood Ireland. "For parents with a child in a creche for example, ECCE covers three hours a day for 38 weeks, not 52.

“Parents who have worked out their budgets don’t often remember that. It can take people by surprise.”

National Childcare Scheme

A small bright spot for those with crippling childcare costs is the National Childcare Scheme launched last year. It comprises two types of subsidy.

The first is a universal subsidy where all families with children under three in Tusla-registered childcare (and those over three not yet in the ECCE scheme), can receive 50 cent off the cost of every hour of childcare used up to a new maximum from September of 45 hours a week – so that’s €22.50 per week or €1,170 a year. This is available regardless of family income.

You are eligible for the 45 subsidised hours if you (and your partner, if you have one) are working, studying or training. If you’re not, the maximum number of hours will be 20.

The available hours include hours spent in school or preschool. So, if you are entitled to 45 hours and your child is in the ECCE scheme for 15 of them, you can claim for 30 hours of “wrap around” care, if it is provided by a Tusla registered provider.

There is also an income-assessed subsidy for families who have children aged between 24 weeks and 15 years and reckonable income of less than €60,000. Reckonable income is calculated on your family’s net income, your child’s age and educational stage, and the number of children.

For example, there is a multiple child discount of €4,300 for families with two children under the age of 15.

“Parents who have children in after school care can apply for the subsidy, I don’t think that’s very well known,” says Byrne of Early Childhood Ireland. So if you pay for your 12-year-old to go to a Tusla-registered minder or club after school, you can claim for this.

A parent of a child in primary school deemed to qualify for 40 subsidised hours a week, will receive discounts off 12 hours of out-of-school care a week during term time – but 40 discounted hours a week during school holidays.

Subsidies are paid directly to the provider. Some 10,268 children have already claimed it for the forthcoming school year, according to Government figures. You can apply at NCS.gov.ie. Those without a MyGov ID can apply by post.

Thrifty lesson

Three quarters of parents say back-to-school costs are a financial burden and one-third cannot afford some of the school items needed, according to a survey last year by the Irish League of Credit Unions (ILCU). It put the cost of sending a child to secondary school at €1,399. For primary school children it was €949.

Education may be “free”, but shelling out for books, uniforms and clothing, school trips and extra curricular activities leave many parents struggling and some in debt. There are some common sense ways to cut costs.

"Ask the principal does your school allow the purchase of generic, non-branded uniforms, does your school offer the Book Rental Scheme or do they run a second-hand book and uniform sale," says Matt Mulvey from the Money Advice and Budgeting Service.

"You could also ask your local book shop if they offer instalment plans and remember the voluntary contribution is voluntary so speak with the principal if you have any difficulty."

The Back to School Clothing and Footwear Allowance does what it says on the tin. You may qualify if you are receiving a social welfare payment (including the Covid-19 Pandemic Unemployment Payment), or taking part in an approved employment scheme or training course.

Your household income must be below a certain limit, too depending on your family composition. For example, if you have four children, your weekly income limit, including wages, income from some social welfare or HSE payments and a means testing of any maintenance, savings and investments, must be €723.70 or less.

For children aged 4-11, the allowance is €150 per child and that rises to €275 for those in second level. You can apply on mywelfare.ie

Exam fees

If you have children doing the Junior Cert or Leaving Cert next year, after Christmas you will be asked to pay €109 and €116 respectively for the exam. Those with a medical card are exempt from the fee – just enter the medical card details on the fee payment form.

Remote access

Ever heard of the Remote Area Boarding Grant? Me neither. But if you’re a second-level student living in a remote area, on an island or require education through Irish, listen up.

If your child doesn’t live within public transport range of a school providing appropriate free second-level education, they may be eligible for a grant of up to €4,947 a year.

To qualify, the child must live 4.8km or more from the school and more than 3.2km from a pick-up point on a transport service to it, and they must be unable to get a place at a suitable school with 25km of home. Applications can be made to the Department of Education.

Tax relief

If you have children, it pays to ensure you are claiming the right tax relief. If you work in the home, caring for one or more children, you're entitled to claim the Home Carer's Tax Credit. It's worth €1,600 a year. That means it reduces the amount of tax the household pays on income, putting €1,600 back into your family's coffers.

A home carer can actually earn up to €7,200 a year and still claim the full credit. Where the home carer’s income exceeds €7,200 up to a threshold of less than €10,400, they are entitled to part of the credit on a sliding scale. This is calculated by halving the difference between the actual income and €7,200 and then reducing the credit by that amount. So for example, a home carer who earns €10,200 will be entitled to a tax credit of €100.

Revenue rather quaintly requires you to have said “I do” in marriage or civil partnership before you can claim the benefit, so cohabitants with children are excluded. To receive the credit, couples must be jointly assessed for tax purposes and cannot claim both the increased standard rate cut-off point for dual income couples and the Home Carer Tax Credit.

If you are parenting solo, back to school and childcare costs may be particularly burdensome. If you qualify, the Single Person Child Carer Credit will reduce the amount of income tax you pay by €1,650 – so that's €1,650 back in your pocket. A person who gets the credit is also entitled to a €4,000 extension in the standard rate income tax band from €35,300 to €39,300. So depending on much you earn, that could mean €5,650 back in your pocket.

In general, the Single Person Child Carer Credit is given to the person who lives with the qualifying child for the whole or greater part of the year (more than six months) – who is called the “primary claimant”.

If you are a primary claimant, you can surrender the credit to a secondary claimant, provided the child lives with that person for more than 100 days in a year and the person meets all the other qualifying conditions. The child may be your own child, an adopted child, a stepchild or any child whom you support and maintain at your own expense. The child must be aged under 18 or over 18 and in full time education. You can apply at Revenue.ie

Depending on the make-up of your family, there are a various supports that may directly or indirectly ease back to school costs. Citizens Information is a good first port of call for confidential advice.