AN INVESTMENT PACKAGE worth €1.1 billion for early learning and childcare was announced yesterday as part of Budget 2024.

Speaking in the Dáil yesterday afternoon, Public Expenditure Minister Paschal Donohoe said that those receiving the National Childcare Scheme (NCS) will see a further 25% reduction in childcare costs. 

“This is further evidence of this government’s commitment to making childcare affordable and will be implemented from September 2024,” he said.

The announcement was welcomed by the Minister for Children Roderic O’Gorman.

However, the Department of Children has said that changes to the NCS will see costs reduced by 25% “on average”.

From September next year, families accessing registered early learning and childcare will receive a minimum hourly universal NCS subsidy of €2.14 off their out-of-pocket costs, rising 74c from a current hourly rate of €1.40.

This is compared to an increase of 90c per hour to the NCS from 50c to €1.40 which began in January this year. 

But while the subsidy is a flat rate, parents will see the specific percentage they pay reduced by different amounts depending on where they live. That’s because childcare costs are higher in urban areas and lower in rural counties.

According to the 2022 Annual Early Years Sector Profile report, administered on behalf of the Department of Children, the average cost of childcare fees in Dublin in 2020 and 2021 were the highest in the country.

Dún Laoghaire-Rathdown had the highest average weekly fees for full day, part time and sessional childcare, followed by Fingal, South Dublin and Dublin City. 

The average weekly full day fees in Dún Laoghaire-Rathdown (€244.08) were 60% higher than the average fees recorded for Carlow (€152.08). 

Speaking to The Journal, Labour Party Senator Marie Sherlock said: “For many families out there, the cut will not be 25%.

“It all depends on what families are paying already. That will determine the cost,” she said.

“If we look back to last January, when Minister O’Gorman’s first major reduction was introduced, we had families where, when they sat down and did the figures, the reduction was anywhere from 6% plus.”

“Here in Dublin, the hourly rates tend to be higher than in other parts of the country. If you have a higher rate of payment, percentage-wise, you’re going to get less of a benefit.”

Sherlock called on the Government to implement a monthly cap of €200 on childcare fees and to establish more childcare facilities. 

Social Democrats spokesperson on children Jennifer Whitmore told The Journal that the subsidy should be reflective of what parents are paying for childcare. 

“It needs to take into account the different rates, but in a way that makes it fair. We can’t see this money being used to prop up large profits by big childcare companies,” she said.

“It’s really important that this money makes a tangible difference to parents, that it’s reflective of the cost that parents pay across the country and that it is that it is all passed on to parents.”

She also called on the introduction of the cut to be brought forward, adding that next September is “just too late for parents”.

“Parents are under huge pressure now and they need support now.”

Minister for Children Roderic O’Gorman defended the increase in subsidies not kicking in until September on Tuesday afternoon. 

“In summer 2022, I set out an ambition to half the cost of childcare for parents in this country recognising it is a major cost for so many families,” he said.

“I was able to take 25% off the cost in the budget in Budget 2023, and in Budget 2024 we have been able to announce that we will take a further 25% off the cost.

“It is going to apply from September of next year and it applies through increasing the subsidy we give to parents through the national childcare scheme.”

He added that it is noteworthy that the National Childcare Scheme will be extended to childminders for the first time in 2024, making subsidies available to thousands of more families. 

In a statement to The Journal, a spokesperson for the Department of Children said: “Families receiving the universal or minimum subsidy will see their average co-payment reduce by 25%.

“As fees can vary from service to service and depending on parents usage, impact estimates must be made as an average of the overall parental financial contribution to fees for their early learning and childcare,” the spokesperson said.

“The Department would also note that a fee freeze remains in place as a condition of core funding which ensures that the increased investment in the NCS translate fully into reductions in early learning and childcare costs, thereby removing any inflationary effect on costs to parents.”