Childcare fees to be cut by up to 25%

Budget 2023: Families will benefit from childcare savings of up to €2,100 a year

Childcare fees are being reduced by up to 25 per cent to help families struggling with high childcare costs in a measure announced by the Government in Budget 2023.

Minister for Children Roderic O’Gorman said parents would save on average €1,200 per child per year and up to €2,100 a year for those availing of the maximum 45 childcare hours under the National Childcare Scheme, the State’s subsidy scheme for childcare.

Minister for Public Expenditure and Reform Michael McGrath said the reduction in weekly fees for those benefiting from the NCS would cost the State €121 million.

“The cost of childcare for many of those families is too expensive and, at a time of rising household bills, the pressure this cost places on many families is considerable,” Mr McGrath said in his Budget 2023 speech to the Dáil.

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The childcare subsidy under the scheme, which is applicable for children up to the age of 15, is increasing from 50 cent per hour to €1.40 per hour from January.

Mr O’Gorman said the Government recognised that childcare in the State was very expensive and was trying to ease those costs “in a significant way”.

‘Significant for parents’

“This is a very significant budget for parents. In 2023, Ireland will be spending over €1 billion on childcare for the first time,” he told The Irish Times.

This milestone in childcare investment was being reached five years ahead of target, he said.

In addition to the higher subsidy, the Government announced further money for the Core Funding scheme for childcare providers, which provides public funding to creches and childcare facilities on the condition that they freeze childcare fees for parents.

The scheme will create further hours and more childcare places for children. Childcare workers are also receiving improved pay and conditions under the new Employment Regulation Order.

The Government is making a further €59 million available to Core Funding, which comes on top of the €207 million announced in last year’s budget.

Almost 4,000 childcare providers, or nine in 10 childcare facilities, have signed up for the scheme that came into operation earlier this month.

Mr O’Gorman said Core Funding had led to a 7.5 per cent increase in the number of childcare spaces for children under the age of one and a 22 per cent increase in spaces for children under three.

‘Near impossible’ choices

He said the key benefit of the scheme was to freeze fees before the Government reduced childcare costs so that “savings for parents wouldn’t be eroded by providers upping their fees”.

Fórsa, the State’s largest public service trade union, said the reduction in childcare costs would help many families but many others would still be left with “near impossible” choices about whether to enter or return to the workforce given the high cost of childcare.

The union’s general secretary and president of the Irish Congress of Trade Unions Kevin Callinan said childcare “warrants a more radical approach” and demands “a permanent and radical solution to be truly transformative, such as a fully funded universal system”.

Orla O’Connor, director of the National Women’s Council, described the reduction in fees as “a significant breakthrough for women, setting us on a clear path to achieve public childcare”.

“For the first time, parents will have their costs reduced. This budget will be the largest investment to tackle affordability for parents,” she said.

She called for further investment in the next two budgets, noting that even with the new significant supports, parents would still be paying “extraordinarily high fees”.

The Children’s Rights Alliance said Ireland had one of the highest childcare costs in Europe and that it was essential the budget “makes inroads” into making childcare affordable.

Julie Ahern, the alliance’s legal, policy and services director, welcomed the reduction in childcare costs which would “alleviate some pressure from families across the country”.

Simon Carswell

Simon Carswell

Simon Carswell is The Irish Times’s Public Affairs Editor and former Washington correspondent