Policy Brief: Extending the National Childcare Scheme to childminders

In early June, the Tusla Early Years Inspectorate (EYI) launched its guidance for outdoors services, When the Roof is the Sky. This document and suite of supporting literature provide guidance to those services operating fully or mostly outdoors. It is further hoped that this guidance will support providers to meet the requirements set out in the regulations and ensure that children’s experiences outside are maximised. This piece will examine some of the headline parts of this guidance and how this differs from previous iterations.

On June 14, the Economic and Social Research Institute (ESRI) released a new research report as part of its Budget Perspectives 2023 series. The Extending the National Childcare Scheme to childminders: Cost and Distributional Effect report was presented at the ESRI’s annual Budget Perspectives conference the following day. In it, the ESRI outlines the cost to the exchequer of extending the National Childcare Scheme (NCS) to childminders and the potential reduction in the cost of Early Years care for parents.

In this week’s policy brief, we delve into the report and unpack its key findings and conclusions.

The National Childcare Scheme

Similar to the Children’s Rights Alliance’s 2023 Child Poverty Monitor 2023, which we covered in this Policy Brief, this research highlights the fact that before the introduction of the NCS, Irish parents faced some of the highest costs among OECD countries.

To address this and reduce the financial burden on parents, the Government introduced the NCS in 2019. The NCS awards universal and means-tested subsidies to families using registered childcare. The scheme does not currently include childminders. However, the National Action Plan for Childminding has committed to extending NCS subsides on a phased basis over a three-year period from 2024 to registered childminders who care for non-relative children in the childminder’s home.

You can read more about the NCS in our Explainer here and the National Action Plan for Childminding here.

Key Findings

The report’s authors simulate several scenarios to calculate the cost to the exchequer and subsequent saving to parents of extending the NCS to childminders. These scenarios are based on the estimated take-up of the scheme by childminders i.e, how many childminders register themselves with Tusla to be eligible for the NCS.

The scenarios make cost estimates based on 25%, 50%, 75%, and 100% take-up of the scheme. The annual cost of extending the NCS increases by between 8 per cent and 29 per cent or €35 – 122 million, resulting in monthly savings of €96 per child to parents, which represents close to 30 per cent of the current cost of care.

The research also highlights the number of potential extra recipients of the NCS. Assuming a 100 per cent take-up of the subsidy by parents of children cared for by childminders, over 80,000 children will be entitled to it. Just over 54,000 of whom are universal subsidy recipients, while over 26,000 will also be means-tested.

“Extending the NCS to childminders, therefore, primarily increases expenditure on, and receipt of, the universal subsidy. This is in line with the observation that families of children cared for by childminders have relatively high average disposable income, limiting their eligibility for means-tested subsidies,” the report states.

The reform will therefore benefit middle-income households more than low- or high-income households, reflecting that those who use childminders have higher average incomes than those using formal centre-based or unpaid Early Years care.

Conclusions

Further to reducing the cost of Early Years care for parents, the extension of the NCS to childminders is likely to have additional positive effects on society.

• It could reduce the demand for centre-based care and alleviate some of the shortages in this area.
• Reduce some of the barriers to work faced by parents, particularly mothers and increase their participation in the labour market.
• More childminders incentivised to register with Tusla could lead to a significant increase in the quality of the care provided by them.

The researchers also acknowledge some limitations of their study, namely that they were unable to separate childminders who are relatives from those who are not. They have therefore likely overestimated the cost of extending the NCS to childminders.

The Policy team will continue to monitor developments in relation to the Natioanl Action Plan for Childminding. If you have any questions, please contact us by email.