Childcare. It’s a word that can strike dread into the hearts of young parents. We all love our children but the economic realities of modern life dictate that both parents in most families will have to work outside the home.
And that’s even before you consider that women – and it is almost always women who are expected to commit to family child-minding duties – have every right to an expectation that they can pursue a career path with the same ambition as their partners.
But, alongside a mortgage, the costs of childcare can be crippling. It’s not a cost I have had to concern myself with for a number of years but I still recall the sheer pressure on the household budget during that time.
Some things have not changed much since then. Too many people employed in the sector are still earning just a minimum wage for the critical role of caring for children at a critical stage in their development. And finding a place where you can place your child with confidence remains a real challenge in some parts of the State.
On the Money: the personal finance newsletter from The Irish Times
Concert controversies, interest rate cuts, airline woes and that expensive bike shed: Pricewatch - the year that was
Conor Pope’s guide to health insurance: Everything you need to know
Women are far more likely to re-gift unwanted presents than men
But other things have changed, and for the better. Most particularly, under some fairly heavy lobbying from business interests, Government finally accepted that reliable childcare was becoming so unaffordable (despite the very low wages) that people were taking the unenviable option of walking away from their jobs to care for their children.
So what’s available out there?
Early Childhood Care and Education Programme
Top of the list is the Early Childhood Care and Education Programme. This is a typically bureaucratic name for what is, in essence, free childcare, at least some free childcare. It won’t cover all costs and parents will still be left filling the gaps or paying for them.
Under the scheme, all children are entitled to a set number of free hours with a childcare provider over the two years before they take the step up to primary school.
Between the start of September and the end of June, it guarantees three hours a day of free childcare, five days a week for 38 weeks (or 182 days). Those children must be at least two years and eight months old (ie for those starting the free childcare programme this month, they will have been born in 2021) and no more than five and a half years of age when they complete the end of their second free year.
Parents need to register the child on a form that can be found here which will include the child’s full name, date of birth, their Personal Public Service (PPS) number and home address eircode as well as some parental/guardian details. This allows the care provider to register the service and get the subvention.
But what about the rest of the time, I hear you ask, and those summer months?
Finding solutions for the summer months is something that parents of toddlers will need to get used to. The early childcare calendar is broadly in sync with what you will be facing when the children progress to primary school. And the hours are not too far short of what you will be contending with then either.
So, no, it is not a total solution but it is certainly a significant financial assistance to parents in meeting the cost of children. Some of that money will still have to be allocated to funding solutions for those other weeks and, indeed, the other hours even when the scheme is running
You can find further details about free preschool here.
National Childcare Scheme
Then there is something called the National Childcare Scheme. Introduced just under five years ago, which offers additional funding to parents and is available earlier than the preschool support.
It works on an either/or approach. You can apply for universal subsidy that is available to all parents regardless of their financial circumstances, or a means-tested one where the amount you get depends on your earnings, the child’s age and the number of children you have.
The parent can choose the option that is most financially beneficial to them but both apply from the time the child is six months old (24 weeks) until they turn 15 years of age.
From this month, the universal subsidy under the National Childcare Scheme has jumped just over 50 per cent to €2.14 per hour from the €1.40 that applied last year. This is designed to soften the blow on out of pocket expenses for up to 45 hours of childcare a week.
Another big plus from this month is that the subsidy – and the means-tested one – also apply to parents who leave their children with registered childminders rather than in formal creche or other preschool settings.
The childminders must be registered with Tusla and have a National Childcare Scheme contract with the department. You can check whether your childminder or creche provider is registered here.
To apply, you will need the child’s date of birth and the PPS number that everyone is now allocated at birth. You will also need a MyGovID account if applying online.
Alternatively, you can apply for the potentially higher means-tested payment that is available to families with income of up to €60,000. You are generally assessed on the income in your previous tax year – so, for parents applying now, the relevant income is what was earned in 2023. However, if your income has dropped sharply this year, you can ask to be assessed on that basis.
Under the means-tested channel, the same 45 hours of subsidy is available where the parent and their partner, where they have one, are working. However, if either the parent or any partner is not working, that falls to 20 hours.
Relevant income is family income, so if you have a partner, both incomes are considered. But if you are living with other adults who are not your partner – at your parents’ home for instance – then only your income is taken into account.
The scheme looks at your net income – that is income from all sources, including many social welfare payments, after tax, PRSI and USC have been deducted. A list of welfare payments that are not taken into account – including, for instance, the Back to School Clothing and Footwear Allowance – can be found under “reckonable income” here.
There are other exemptions. If you have two children under the age of 15, a further €4,300 of your income is discounted. If you have more than two children under that age, the allowance rises to €8,600.
Any pension contributions you make in line with limits permitted by the Revenue Commissioners are also left out of the income calculation, as are any maintenance payments you might be making to a former spouse or a child.
So how valuable can this means-tested subsidy be? The universal payment will be worth up to €96.30 a week if you use the maximum 45 hours. That comes to €5,007.60 over the course of a full year. Under the means-tested alternative, the payment can be as high as €11,934 if your net reckonable earnings are below €26,000.
If you are not sure whether you will benefit from the means-tested subsidy, you can crunch the numbers on a “subsidy calculator” on the National Childcare Scheme website.
Childcare remains a hot political potato so it would not be a surprise to see further improvements in supports announced in Budget 2025 when Minister for Finance Jack Chambers and Minister for Public Expenditure and Reform Paschal Donohoe deliver their speeches on October 1st, but any improvements are not likely to kick in until this time next year if previous protocols are followed.
Childcare in Ireland remains expensive as any parent will tell you. But thanks to the improvement in supports over recent years, there is at least some acceptance that parents of your children do need a helping hand.
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here.
