I pay €1,000 per month for creche (full time). What is the Budget 2027 impact here? I saw a headline suggesting childcare was being reduced to €550 per month up to senior infants but I can’t imagine that’s right. I hope so but that’s a crazy decrease.
UM
Getting your head around childcare costs can be fiendishly complex. There are different subsidies depending on your financial status and the age of the child and different bands depending on how long the child is in care.
And if it is any consolation, it is not just you and other parents who get confused. In his speech, the Minister for Public Expenditure and Reform, Jack Chambers, did say he was “reducing the maximum childcare fees paid by parents, from €735 to €550 per month for children up to senior infants”, putting €2,200 a year back into parents’ pockets.
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Not quite – at least not for everyone, including you. But that does not mean there was not good news for you on childcare in the budget – at least from September of next year when the budget childcare measures kick in.
The Minister was referring to the maximum amount a parent of a child receiving between 40 and 50 hours of care a week can be charged in a creche that has signed up to the Government’s “core funding” scheme, where Government subsidises the cost of care. This is called Band E.
If you are paying €1,000 – or more accurately €959 – a month, you will be in Band F, where your child is receiving care for more than 50 hours a week.
And you are far from alone in having been taken aback by talk of the €735 and €550 maximums.
The Minister’s team insist that Band E is the one most commonly used by parents across the State. That may be so; the statement was not accompanied by figures. What does seem certain is that most parents in Dublin and some surrounding commuter counties, as well as areas of Cork and Galway, are paying Band F fees like you.
The net cost to you is determined by two things: fee per band and the personal subsidy to which each child is entitled, depending on your income.
Under the budget measures, the fee for Band F will fall from €336 a week to €300. And, for those on the universal subsidy (anyone with family income of more than €73,000), the subsidy for children up to senior infants will rise to €2.50 from €2.15 per hour up to a maximum of 45 hours.
If your income is below €73,000, the subsidy may be higher and, if it is below €36,500, that could be as high as €5.10 an hour.
When they say household income, they mean income minus any pension contributions you pay. You also do not include certain welfare payments and, if you have more than one child, there are further income disregards.
Anyway, back to the numbers. That €2.50 an hour universal subsidy amounts to €112.50 a week. Taking this from your €300 “fee”, you are left with €187.50. From September next year (11 months in the future), that will be your weekly fee, amounting to €750 a month.
That means a fall of at least €209 in your childcare cost per child each month, or somewhere between €2,300 and €2,500 over the year. So good news, if not quite a drop in charge to €550.
Of course, that is only if you are in a creche that operates under Government core funding. If not, they are free to charge what the market will bear.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice.
