The Early Childcare Supplement is to be halved to €500 from May 1st and scrapped by the end of the year.
However, a free pre-school year is to be introduced for parents of children in daycare.
Minister for Finance Brian Lenihan said that child benefit will be means tested from next year and that he will consider bringing it into the tax net as part of his next budget.
From next January a free pre-school year for children aged between three-and-a-quarter and four-and-a-half is to be introduced.
Under the scheme, children enrolled in playschools will receive free pre-school provision of three hours per day, five days each week over a 38 week year. This equates to a weekly capitation grant to the service provider of €64.50 and parents with children enrolled in these services will not be charged.
Children enrolled in full- or part-time childcare services will receive free pre-school provision of two hours and 15 minutes per day, five days a week over a 50 week period. This equates to a weekly capitation grant to the service of €48.50, with parents paying for their childcare net of this
amount.
Over the course of the year, the financial benefit of the scheme for a single child will be over €2,400.
The scheme will be introduced from January 2010. and from September of next year, the pre-school year will run from September of each year in line with the school year.
All children aged between 3 years 3 months and 4 years 6 months on September 1st each year, will be eligible and parents who wish to avail of the scheme can enrol their children with the available participating service of their choice.
The Irish Childcare Policy Network (ICPN) gave a guarded welcome to the Government's planand expressed the hope that the free pre-school year for 3-4 year olds would be implemented in good faith and with the needs of all children at its heart.
Director Ciairín de Buis expressed concern over the fact that the budget allocated for the pre-school year was just over a third of that currently allocated to the early childcare supplement.
"It is important that Irish children don't get a second rate service," she said adding that savings made should be reinvested in early childhood care and education for all young children.
“Young families will be down substantial amounts of money but if they can be assured that their children will have access to good quality childhood care and education the impact may be lessened.”
