Ireland has among the highest childcare costs in the world. Latest research shows the average net cost – taking account of child benefit and other State supports – is around 28 per cent of earnings compared to the EU average of 12 per cent. The Government’s response has been to introduce changes which it says will make quality childcare more accessible and affordable.
The National Childcare Scheme provides financial support for parents towards the cost of childcare through a combination of universal and targeted subsidies. There is much to welcome in it: the scheme replaces existing targeted childcare programmes with a new streamlined system that includes “wraparound” care for pre-school and school-age children.
However, there is emerging evidence of unintended consequences which threaten to push the cost of after-school childcare even higher for many middle-income parents. Some of the changes may also threaten the future of after-school childcare services aimed at vulnerable children at risk of early school-leaving.
New regulations, due to come into force ahead of the new school year, mean school-age childcare providers will be obliged to have one adult for every 12 children on their premises. Some providers say this would effectively double the number of adults required and increase costs by up to 40 per cent.
Although those on lower incomes are likely to be shielded through subsidisation, many middle-income parents will not. Parents are required to have a net income of less than €60,000 per year to be entitled to subsidies but where a couple are both earning the average wage, for instance, their income would be well above this threshold.
Separately, there are concerns the new system could force the closure of after-school childcare services for vulnerable children. This is because parents who are not working will no longer be entitled to the same level of targeted financial assistance. Parents are required to be either studying or working to avail of higher subsidies.
There are laudable policy objectives behind the new scheme. These include encouraging labour market activation and reducing child poverty and persistent poverty traps. It is essential too that staff numbers in childcare settings are sufficient to ensure children receive appropriate care and attention and that the staff involved are adequately remunerated.
But there are growing indications that instead of easing the burden on families, the new regime may make the lives of many parents more difficult and threaten the future of after-school services to children who have most to gain from them. In those circumstances, the likely impact of the changes should be re-examined and unintended consequences avoided. There is ample time to do so ahead of the new school year.