Childcare allowance may be increased in budget

A childcare allowance given to all families irrespective of their level of income may be increased in the last budget before the election as Fine Gael seeks to put family-friendly policies at the centre of their bid for a third term in power.

Senior Government figures have said they are examining increasing the €20 per week universal childcare subsidy in the October 8th budget.

It is one of a number of options being examined, although the level of any potential increase, if one is introduced, is not yet known.

The cost of such a move will be a factor, with Minister for Finance Paschal Donohoe severely constrained after he opted to prepare a no-deal Brexit budget.

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In announcing his decision to opt for a no-deal budget, Mr Donohoe this week said he would not cut any personal taxes in Budget 2020 and also indicted that social welfare increases would not be as significant as previous budgets.

Currently, parents with a combined take-home pay of less than €60,000 a year can qualify for up to 40 hours of subsidised childcare a week for children aged between 24 weeks and 15 years.

Anyone above that income threshold receives the universal €20 per week subsidy. The universal childcare subsidy applies to all children until they become eligible for the Early Childcare Care and Education (ECCE) scheme which provides two free years pre-school.

Speaking at the Fine Gael think-in this week, Taoiseach Leo Varadkar highlighted “the Budget, Brexit, balanced regional development [and] a better deal for families” as the most important issues in the coming months, as well as housing, health and climate change.

Party sources said Ministers have discussed increasing childcare supports and behind closed doors sessions at the think-in heard calls for Mr Varadkar to return to his theme of representing people who “get up early in the morning”, which was a central pitch of his campaign for the leadership of Fine Gael in 2017.

Increasing the universal subsidy for all parents, rather that only focusing on increases for those on lower incomes, is seen as expanding on that theme.

“Leo Varadkar was elected on a promise to help people who get up early in the morning,” said a party source. “At its core that means helping people who are working.”

Childcare sector

Other sources argued that even couples on two incomes over the incomes threshold were in need of support.

“Those conversations are happening,” said a senior Government source of discussions around childcare supports, adding that parents at work who exceeded the threshold needed help with childcare bills as well as those on lower incomes.

Sources said Budget 2020 would be used to implement polices that would also feature in the Fine Gael manifesto at the general election.

However, opting to increase the universal subsidy could put Fine Gael at odds with Minster for Children Katherine Zappone, who oversees childcare policy.

Ms Zappone has already said she wants wants to increase the number of childcare hours available to parents below the threshold under the new National Childcare Scheme, which comes into effect in October of this year.

She also wants a fund created in the budget to allow childcare providers to bring staff salaries to a more acceptable level.

In recent weeks, she said she was deeply unhappy that childcare is the lowest-paid sector in Ireland with an hourly rate of just €11.93.