Parents have been asking childcare providers about their fees after the budget. Alamy
AnalysisConsumer Issues
Parents feel gaslit by the government’s attempt to spin the budget announcement.
THEY SAY WHEN you’re explaining you’re losing in politics.
Minister for Children Norma Foley had to do quite a bit of explaining at a press conference after last Tuesday’s budget announcement, where it fell to her to set out the small print on Public Expenditure Minister Jack Chambers’ promise that childcare fees would be capped at €550 per month, down from €735 per month.
Confusion continued. By Friday, Foley was sending out another long statement to the media by email. Here, she set out in more detail how the childcare costs changes arising from the budget will work across different scenarios.
She had to do so because so many families were left trying to figure out how exactly they are affected following a budget day of spin.
Parents with kids in a crèche feel gaslit.
“The childcare cap is ridiculous,” was the verdict from one dad who contacted The Journal.
His child’s crèche does not offer 45-hour contracts – the ones to which the much-vaunted €550 cap will apply from next September for younger kids. Rather, he must pay for over 50 hours care.
That is the only option his crèche and every other crèche in his area of Dublin offers; this is the norm across much of the southside of Dublin and increasingly on the northside too.
Links, one of the biggest crèche chains in Dublin with 16 locations, emailed parents last week after receiving numerous queries about its fee structure following the budget announcement. Other crèches said they have also received numerous queries from parents.
Links operates a 55-hour service at all its crèches (7.30am to 6.30pm). Parents with a longer commute need longer hours, while some crèches set longer hours by default.
“The recent government announcement suggested that parents do not pay above €735 per month. This announcement is unintentionally misleading in its lack of information,” Links told its families.
The current cap for crèches operating for 55 hours is €1,456 per month, Links said.
Foley claimed the government used 45 hours as its budget day case study because it is the most common contract.
It’s understood her department has told some childcare providers at a meeting last week that 45-hour contracts only impact 18% of the sector. The department has been asked what proportion of services offer 45 hours.
The thing is, 45 hours is an important number for another reason – it’s the limit on the number of hours for which the government will pay out hourly subsidies.
It suits the government to talk about the benefits accruing to those on 45-hour contracts, because parents paying for 50 or 55 hours of care per week do not receive a subvention for a significant chunk of their hours.
Those families will benefit less from the budget measures, which raised the hourly subsidy for kids up to senior infants from €2.14 to €2.50. (Families whose kids are in first class – age 6-7 – and above next September won’t qualify for the €2.50 rate at all.)
According to figures provided by the department, a family paying for 50 hours’ care – currently capped at €959 per month – will be charged no more than €750 per month from next September.
The department says that’s a saving of over €2,500 over a 48-week year. But parents in this category will note that their monthly fee cap remains over a third higher than the €550 cap the government made so much of on budget day.
Then, points out the National Women’s Council (NWC), there are up to 46,000 children on waiting lists for childcare, plus the 52,000 families using the services of childminders, plus the 415 crèches operating outside the Core Funding scheme because they don’t believe it is financially viable for them.
“Many parents will feel very left behind,” said Corrine Hasson, executive director of the NWC.
“And the reality is that the brunt of the childcare crisis is borne by women.”
Promises vs reality
A cap on fees sounds great: it would make the arcane world of crèche fees understandable, accountable and affordable.
That’s why both Fianna Fáil and Fine Gael promised a €200 monthly ceiling on childcare fees going into the last election (and Sinn Féin too). The government says it will deliver this by the end of its term.
However, the Department of Children has admitted since budget day that the pro tempore “caps” it will apply from next September for services operating within the Core Funding scheme will only hit a minority of services.
When the caps kick in next September, just 23% of providers will be required to reduce at least one of their fees as a result, the Department of Children told The Journal.
That means three quarters of services – and the families using them – are not affected by the key measure that Chambers told the Dáil was putting the government “firmly on the path” towards the promised €200 limit on fees.
The reality is that most services are already charging far less than the maximum fees under the 2026 and 2027 caps (although well above €200 per month). The median fee being charged for 45 hours for younger children is €800, working out at €415 after hourly subsidies are factored in, according to the department.
The department, for its part, makes the case that the caps lower costs for the families paying the highest fees. And while many families won’t see any change to their fee as a result of the new caps, since they are already paying less than that, they will still benefit from the higher hourly subsidy if their kids are young enough to qualify, as well as higher discounts for families with more than one child.
Families on lower incomes also qualify for higher subsidies, and the income threshold to get this help has been raised by €4,500.
And for everyone in the sector, there is a freeze on fees – that is a condition of Core Funding.
Childcare services
The big concern for childcare services is that any reduction in fee income resulting from the new caps will not be fully compensated through a commensurate increase in exchequer funding.
Foley was asked about this on budget day. She said she believed the 35% increase in funding for the sector provided in the budget was “very significant” but she did not categorically state that there would be no shortfall for any services. Neither did her department confirm whether this was the case when asked this week.
Childhood Services Ireland (CSI), an organisation for the sector under the umbrella of the Ibec employers lobby, argues that any loss in income that isn’t compensated for by the government ultimately poses a risk to the quality of care and facilities.
Core Funding from the government to childcare providers only funds “in ratio” staff – that is the bare minimum required by law. For babies under 12 months that’s one adult for every three children, for toddlers aged 1-2 it’s one adult per five children, and so on.
Stephanie Roy, director of CSI, noted that any additional staff above minimum ratio requirements – which services may employ to reduce stress and protect against burnout among staff and to provide extra support to children – will be harder to fund if the government does not fully make up fee shortfalls.
Roy noted that services could also find themselves under pressure when it comes to paying for other overheads such as new toys, painting and other upkeep of facilities, and upgrades such as air conditioning – increasingly necessary with climate change.
“I think increasingly, what we’ll see are concerns around quality. I don’t know any provider that would continue to offer poor quality childcare. They’d rather close their doors,” Roy said.
The National Childcare Scheme has brought childcare costs down for families and hugely increased the state’s involvement in the sector. However, not all its provisions are child-centred.
For instance, if parents regularly send their children to crèche for fewer than their agreed hours over a 12-week period – say if they are picked up early by their parent or grandparent one or two days a week – they risk losing the hourly subsidy for the hours their child misses. After eight weeks, parents can receive a “warning” and after 12 weeks their subsidy could be cut for the hours the child did not attend.
The department says if children are “occasionally picked up early or miss an occasional day this will not impact a family’s subsidy” but it has to provide “an appropriate balance” between supporting parents and “ensuring the efficient use of exchequer funding”.
The state isn’t just interested in the welfare of children; the welfare of the exchequer is also on the agenda.
With two budgets down and three to go, the government will now be under serious pressure to push on towards the €200-per-month childcare it promised. It is a long way off that level. Families will be hoping the quality of their children’s care is not compromised to get there.