The latest news and information

The Future of the Department of Children and Youth Affairs

Policy, Advocacy and Campaigning Team Update: Dáil Questions

April 28, 2020

As was mentioned in the April 15 edition of Early Times Weekly, the Policy, Advocacy and Campaigning team has been working with a number of TDs to have questions raised in the Dáil about the Wage Subsidy Childcare Scheme (WSCS). At the time of submitting the questions, there was a great deal of confusion regarding the scheme and how it would operate for providers and early years staff. The first three questions below refer to the concerns that our members had regarding when the scheme would be operational and the impact that it would have on tax, PRSI and holiday pay liabilities.

As is often the case with Parliamentary Questions, by the time that they are answered by the Minister, the information requested is already in the public domain. This is undoubtedly the case here where the updated FAQ documents from the Department and Revenue now contain most of the information that we were seeking. You will also note that two of the questions have the same response, this is often a method used by various government Departments when they believe that the questions are similar enough to answer at once.

110. To ask the Minister If she will clarify whether the Wage Subsidy Scheme is available to all childcare providers who sign up to the contract, regardless of whether they were due to open during Easter holidays or not.

– Jennifer Whitmore

 

Answer

The COVID-19 pandemic has resulted in an unprecedented situation that has required a series of emergency responses from the Government.

I am acutely aware of the particular impact the pandemic and the emergency measures have had on childcare providers. I am also very conscious of the importance of the childcare sector, particularly in the context of the current conditions and with a view to supporting the economy as we move beyond this crisis.

Recognising this, I launched the Temporary Covid-19 Wage Subsidy Childcare Scheme on April 15th following my public commitment to the development of the scheme on March 25th.

The Revenue’s Wage Subsidy Scheme is available to all Early Education and Childcare providers and my Department’s associated Wage Subsidy Childcare Scheme is also available to all providers, regardless of their annual service calendar.

The aim of the Wage Subsidy Childcare Scheme is threefold:

  • to support the sustainability of the Early Learning and Care and School-Age Childcare Sector so that it is in a position to reopen after COVID-19;
  • to provide parents with a reassurance that they are not required to pay fees during this COVID-19 crisis, while providing them with reassurance that they will maintain places for their children;
  • and to give Early Learning and Care Educators security and retain these vital Educators in the sector.

To achieve this, the Wage Subsidy Childcare Scheme will provide funding towards a portion of staff wages and services overhead costs. The funding will be paid on the 24th of April to any providers who sign up by April the 21st. Details of how to sign up have been made available through the Pobal programme platform used by childcare providers.

The exact terms are contained within the funding agreement. In summary only those staff who are on the payroll and on the Revenue wage subsidy scheme can avail of the wage top up under the DCYA Wage Subsidy Childcare Scheme.

Clearly the sector is experiencing considerable anxiety and stress at this time. To alleviate this I had directed that the programme payments (including ECCE (free pre-school) and the National Childcare Scheme) continue on an ex-gratia basis, despite services being closed until the Wage Subsidy Childcare Scheme was up and running.

It was important to move to this new temporary funding model which repurposes existing monies to support the multiplicity of childcare provider types with varying ratios of state income and parental contribution.

The Wage Subsidy Childcare Scheme builds on the wider provisions by Government and also recognises the unique place and importance of the childcare sector.

Many queries from providers are now answered in a comprehensive set of FAQs released on Wednesday the 15th of April. These will be updated as required. I would request that the Deputy directs concerned providers to these documents for support and guidance. The Pobal Service Provider Centre and the CCCs are also available to respond to queries.

 

 

738. To ask the Minister for Children and Youth Affairs if she will outline the tax, PRSI and Holiday Pay liabilities for early years settings who opt into the WSCS Scheme and if she will make a statement on the matter. 

– Jennifer Whitmore

 

738. To ask the Minister for Children and Youth Affairs if she will outline the tax, PRSI and Holiday Pay liabilities for early years settings who opt into the WSCS Scheme and if she will make a statement on the matter. 

– Jennifer Whitmore

 

Answer

The COVID-19 pandemic has resulted in an unprecedented situation that has required a series of emergency responses from the Government.

The aim of the Wage Subsidy Childcare Scheme is threefold:

  • to support the sustainability of the Early Learning and Care and School-Age Childcare Sector so that it is in a position to reopen after COVID-19;
  • to provide parents with a reassurance that they are not required to pay fees during this COVID-19 crisis, while providing them with reassurance that they will maintain places for their children;
  • and to give Early Learning and Care practitioners security and to retain these vital Educators in the sector.

To achieve this, the Wage Subsidy Childcare Scheme will provide funding towards a portion of staff wages and services’ overhead costs. The funding will be paid on the 24th of April to any providers who sign up by April the 21st. Details of how to sign up have been made available through the Pobal programme platform used by childcare providers.

Where an employee receives payment arising from their employer’s participation in WSCS, that payment should be treated as gross pay. Under the Revenue Temporary Wage Subsidy Scheme, employer’s PRSI is reduced to 0.5%, while employee’s PRSI does not apply.

Holidays and other leave arrangements are a matter for employers and employees, and depend on local circumstances.

The Wage Subsidy Childcare Scheme builds on the wider provisions by Government and also recognises the unique place and importance of the childcare sector.

Details regarding the mechanics of the scheme and answers to many queries received from providers in recent days are now addressed in a comprehensive set of FAQs released on Wednesday 15th April. These will be updated as required. I would request that the Deputy directs concerned providers to these documents for support and guidance. The Pobal Service Provider Centre is also available to respond to queries.

 

The fourth question that we put to the Minister concerned the calculation methodology that resulted in 15% of staff wages being accepted as a fair sum for overhead costs. We were informed by the Department that this figure came from a report that they had commissioned on the cost of delivering childcare in Ireland. The report, which was compiled by the firm Crowe, was presented to the Department in January of this year. It has to date not been published. Early Childhood Ireland has, for a number of months, been calling for its release. Given the crucial role that it now plays in the calculation of emergency funding we believe that it is unacceptable that the Department has further delayed its publication. In the response below, the Minister says the publication, which was due to take place this month has been “slightly delayed”. We will continue to push for the early publication of this important document.

739. To ask the Minister for Children and Youth Affairs if she will now publish without further delay the “Independent Review of Cost of Delivering Childcare in Ireland” that was used as a basis to calculate the cost components that led to 15% of staff costs covering overheads as part of the WSCS scheme.

– Jennifer Whitmore

 

Answer

Crowe was commissioned by the Department of Children and Youth Affairs to undertake an independent review on the cost of providing quality childcare in Ireland. The brief included:

  • analysing the current costs of providing childcare and the factors that impact on these costs;
  • the development and delivery of a model of the unit costs of providing childcare that allows analysis of policy changes and variation in cost-drivers, including the potential impact of professionalisation; and
  • providing an objective, high-level market analysis of the childcare sector in Ireland, including analysis of fee levels charged to parents.

An approach and methodology were decided upon in partnership with the DCYA and a number of key activities have been undertaken to date. These include:

  • engagement with key stakeholders from the sector, including the Early Years Forum, provider representative organisations, the City and County Childcare Committees, statutory bodies, childcare professional training bodies, and academics;
  • the administration of a survey to all centre-based childcare providers nationally, to provide the data on which the modelling tool would be based;
  • the development of a cost modelling tool (and guidance document) to present the baseline cost data and enable the testing of the impact of a range of scenarios, namely changes to cost drivers on the unit costs of delivering childcare services; and
  • a final report detailing the elements of the review, and the key findings.

The draft final report, cost modelling tool and guidance were subject to an independent peer review by an economic consultancy firm. Arising from the external peer review, an additional piece of work was undertaken to add further value to the work.

The project provides a robust evidence base for the further development of high quality ELC and SAC in Ireland. The outputs, including the costs calculator developed through this project, also form a key input into the setting of capitation and subvention rates for future funding schemes and will be considered by the Expert Group recently convened to develop a new funding model for ELC and SAC.

Final outputs were received in January 2020, and preparation was underway to launch the report in April 2020. However, owing to the impact of Covid-19, it is anticipated that the report will now be slightly delayed.

 

The Policy, Advocacy and Campaigning Team would like to thank the Social Democrats’ Spokesperson for Children and Youth Affairs, Jennifer Whitmore TD and her staff for their assistance in tabling the above parliamentary questions. As soon as we have the replies from the other questions that were submitted, we will be sure to share them with our members. 

Share share share share
Tags: , , , , , ,
Site maintained and developed by Cloud Nine