The €550 cap on childcare costs announced in the budget will only relate to service providers receiving “core” funding from the State – meaning 7% of providers will fall outside the limit.
Minister for Children and Fianna Fáil Norma Foley confirmed the situation at a post-budget announcement press conference.
Speaking to reporters at Government Buildings, Ms Foley announced the €550 ceiling will be in place by next September, saying it is not possible to do so earlier as her departmental changes run in tandem with the school year.
However, asked if she can guarantee no one will be paying more than this for childcare services by next September, Ms Foley confirmed the new cost ceiling will be for providers receiving “core” funding from the State.
While this amounts to a significant 93% of childcare providers, 7% of providers fall outside this group.
Ms Foley said this breakdown is still significant and a major step forward in helping young families with the cost of childcare.
Budget 2027 also sees an enhancement to Childcare Services Relief, with the tax exemption increased by €5,000 to €20,000.
Minister for Finance Simon Harris said it will help increase supply and remove the limit on the number of children who can be minded under the relief, as well as also provide greater flexibility to childminders to support the needs of parents and families.
“Despite real progress over recent years, the cost of childcare is still too high for many families,” he said.
Increase in child support payment rates
The weekly rates of child support payments for children under and over the age of 12 will increase by €6, which will bring the payments to €64 and €84 per week respectively.
The Working Family Payment weekly income threshold will increase by €30.
“Making progress to reduce child poverty is a key priority for Government and this Budget takes decisive steps to move us further along that path,” Ministrer for Public Expenditure Jack Chambers said.
“Reducing childcare costs is a meaningful way of making progress, making it more affordable for families to raise their children and supporting people to participate in our workforce.”
Mr Chambers said for this reason, he is reducing the maximum childcare fees paid by parents from €735 to €550 per month for children up to Senior Infants which he said will save parents €2,220 per child per year.
Mr Chambers said the €7.6bn allocation for the Department of Children, Disability and Equality will also support the childcare workforce to grow, strengthening capacity across the sector.
He said it will also insure that almost 100,000 children can avail of free preschool under the Early Childcare and Education Programme, expanding the access and inclusion model, providing additional support for around 1,000 children with disabilities under the age of three.
He said this “further residential and foster care placements from Tusla” will also be provided, “insuring greater capacity to support children in care and grow Tusla’s workforce by 322 staff to a total workforce of 6,257”.
