Universal childcare subsidy extended to children under 15

Budget 2022: New measures to improve staff wages a ‘turning point’ for sector – McGrath

A universal subsidy for parents to help meet the costs of childcare has been extended to all children aged under 15 as part of what the Government described as a “turning point” in the State’s approach to the sector.

The extension of the universal subsidy under the National Childcare Scheme, which is not means-tested, would apply to up to 40,000 children at a cost of €5 million. The subsidy provides 50c per hour towards the cost of childcare for up to 45 hours per week.

In his budget speech, Minister for Public Expenditure Michael McGrath said €716 million would be invested in the sector next year by the State, with an additional €78 million in core funding going to providers. The additional funding for providers would be tied to a commitment that there will be no further increases in the fees facing parents, he said.

Mr McGrath said a new funding stream for 4,700 creches and childcare facilities would be put in place from next September. The measures, aimed at improving the quality of services and conditions for workers in the sector, would cost an estimated €69 million.


He said these moves marked a “turning point” in the State’s approach to childcare and “demonstrate the Government’s commitment to the sustainability” of the sector.

The Minister said the practice of deducting hours spent in pre-school or school from the subsidised hours available under the scheme would be stopped. This would benefit an estimated 5,000 children, many from low-income households, at an overall cost of €4 million.

Further short-term measures, along with €37 million in funding for Covid-19-related costs, would help the sector adopt the proposed reforms.

The Ibec group Childhood Services Ireland said the budget measures did not go far enough to address issues around affordability for parents and sustainability concerns for providers.


It said that what parents really needed was an increase in the amount provided in universal childcare subsidies.

Darragh Whelan, director of Childhood Services Ireland, said that “extending the amount of subsidised childcare hours does nothing for parents who can’t afford childcare in the first place”.

Frances Byrne, policy director of Early Childhood Ireland, said the representative group was “very pleased” to see increased investment given childcare had been a “footnote” in last year’s budget.

Ms Byrne said reforms would be needed in how State payments to providers worked to better account for many parents’ new blended working arrangements. There should be “no financial penalties” for providers in cases where children stayed at home on certain days parents were remote working, she said.

Karen Clince, chief executive of Tigers Childcare, which employs more than 200 staff, said the budget was “positive news” but lots of detail needed to be clarified. Changes to the National Childcare Scheme would provide help to hard-pressed middle-income families when it came to fees, she said.

There needed to be “a fair wage scale” for the sector and further clarity on how caps on fees for parents would work, she said.

Pearse Doherty, Sinn Féin’s finance spokesman, said families were being “fleeced by the cost of childcare” as a result of under-investment in the sector.

He said Sinn Féin would reform the current “dysfunctional” model of high fees, low staff wages and limited access into a fully publicly-funded service.

Trade union Siptu has said the additional funding “will go some way to addressing the crisis in the early years sector”.

Darragh O’Connor, Siptu’s head of strategic organising, said at present poor wages were driving childcare staff out of the sector. A pay deal arising out of upcoming talks at an Early Years Joint Labour Committee would hopefully “see thousands lifted out of poverty”, he said.

Jack Power

Jack Power

Jack Power is acting Europe Correspondent of The Irish Times