Creches look for clarity on Zappone financial assistance scheme

State to underwrite wage bill in exchange for waiving fees charged to hard-pressed parents

Katherine Zappone has been told that her ‘proposal will immediately result in the termination of employment for a significant number of staff’. File photograph: The Irish Times

Katherine Zappone has been told that her ‘proposal will immediately result in the termination of employment for a significant number of staff’. File photograph: The Irish Times

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Creche groups have written to Minister for Children Katherine Zappone seeking further clarity on her bailout of the sector, which will mean the State effectively nationalises the wage bill for creches in exchange for waiving of fees charged to parents for the next three months.

Early Childhood Ireland (ECI) has raised several queries with the Department of Children, including whether operators will have a choice about signing the new emergency Covid-19 contract.

They have also asked for clarity on issues concerning holiday pay, maternity leave and how owners who do not pay themselves a salary will be treated.

While ECI welcomed the proposal, some creche groups have objected to the scheme, according to correspondence seen by The Irish Times. In a letter to Ms Zappone, the Federation of Early Childhood Providers argued that in the absence of the subsidies, while wages will be covered, significant cash-flow issues will emerge.

“Your proposal of yesterday will result in services not being able to meet their overheads or fund the payment of staff as we will have considerable cash flow issues. Your proposal will immediately result in the termination of employment for a significant number of staff, running into the tens of thousands, and the closure of a vast number of services nationwide.”

Single payment plan

The group said it is “demanding that the DCYA [Department of Children and Youth Affairs] re-instate all existing [subsidy] schemes until the end of this crisis”.

Under a scheme announced by the Government on Tuesday, the department will pay 30 per cent of wages up to a level of €38,000 per year for the next three months, on top of the Government’s wider scheme to cover 70 per cent of wages up to this level.

Due to the relatively low average salary in the sector, this will cover the majority of the wage bill across the sector. However, the department is suspending other subsidies it usually pays to creches during this period and replacing them with this single payment.

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