Call for wage subsidies for childcare sector to be extended

The body representing creche owners is urging that wage subsidies enacted during the Covid-19 crisis be extended once the emergency passes in an effort to bring the cost of childcare under control.

The Department of Children & Youth Affairs (DCYA) last month announced it would top up the State’s existing wage subsidy scheme with additional funds, effectively making it responsible for the overwhelming majority of wages being paid in the sector.

Now, representative group Early Childhood Ireland (ECI) has written to the leaders of Fine Gael and Fianna Fáil, asking them to extend the measures, which it says will eventually bring down the high level of fees paid for childcare by Irish parents.

The body also believes it will tackle the high rate of staff turnover in the sector. In a document sent to political parties on Wednesday, ECI wrote that “in the spirit of any new social contract, we hope that the new government will see to it that the Wage Subsidy Childcare Scheme is left in place for sector staff”.

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“This would also provide the basis for a sensible way to target investment and would help to improve the prospects and sustainability of the early years sector and affordability for parents.” Ireland spends about 0.2 per cent of GDP on pre-primary education, compared with an OECD average of 0.8 per cent of GDP, according to Social Justice Ireland.

Irish parents pay among the highest fees in the OECD, while wages in the sector remain comparatively low. Frances Byrne, director of policy and advocacy with ECI, said "direct pay to the sector's professionals would immediately improve the current staff turnover rate of 23 per cent, and would increase quality provision for babies and children".

“It would also assist the next government to target funding which would move Ireland off the bottom of the EU investment table and would, in time, mean a reduction in fees for parents.”

Wage subsidies

Separately, new data from DCYA shows that almost 80 per cent of childcare providers have signed up to the enhanced wage subsidy scheme. Under the terms of the scheme, the State will pay 100 per cent of a wage, up to a limit of €586 per week. Services signing up for the scheme must give an undertaking not to charge parents any fees, and that their child’s place will be secure once creches reopen.

The DCYA data shows that from next month, if all services take up the scheme, the weekly costs to the department will be in the region of €6.04 million. This compares with an average weekly cost of normal subsidies to the childcare sector, which have been suspended in favour of the wage payment scheme, of about €10.4 million.

However, the cost to the exchequer is likely to be higher than the €6.04 million, as this accounts for the departmental contribution only. The wider Government wage subsidy scheme, which picks up much of the wage bill for the sector, is not included in these calculations.

While the take-up figures are relatively strong, the Federation of Early Childhood Providers reiterated its warning that the scheme will not be enough to keep all settings open. Chairwoman Elaine Dunne said some providers would struggle to meet their costs under the new scheme, and that "a substantial number of services are already privately reporting to us their intention to close".