Rise in childcare prices to offset increased State subsidies for some parents

Thousands of parents availing of State subsidies towards the cost of early education and childcare services could miss out on up to €1,600 in increased funding that they were due to receive from September because of price increases being introduced at the same time.

In documents sent recently to the owners of the more than 4,000 crèches and other facilities participating in the early education and childcare funding scheme, the Department of Children said providers charging less than the average rates in their county could apply for permission to increase their fees for the year from September 1st.

The maximum permitted increase amounts to €33.30 a week, or about €135 per month per child based on 45 hours care a week. This is the same maximum amount universal payments under the National Childcare Scheme are due to rise by. As a result, many working parents with children in what are currently less expensive crèches could see money they hoped would reduce their childcare costs being swallowed up by fee increases.

The current average charges set out in the documentation vary from county to county, with Dún Laoghaire-Rathdown the most expensive area at €264.02 for five full days. Leitrim, at €151.71, is the least expensive on average. Other more expensive areas are in or around Dublin, with average prices for full day care in the Fingal, Dublin city, South Dublin and Wicklow council areas coming in at about €1,000 a month.

The decision to allow increases is an attempt by the department to address complaints by some service providers that they were operating at rates set as far back as 2017, which they could not increase because of commitments required when signing-up to the State’s early learning and childcare funding scheme.

The scheme has a total budget of €1.1 billion for this year and will give providers increased funding towards staff, administrative and other costs from September.

The scale of the increases to be paid to providers under a complicated array of different funding streams vary substantially.

However, some providers have pulled out of the main core funding scheme to increase fees as they want, according to Childhood Services Ireland (CSI), a representative body. The department said service provider numbers increased in year two of the scheme, with registration for year three currently under way.

CSI director Stephanie Roy said the fee increases being permitted are not high enough given the increased costs faced by providers in recent years, especially in services where fees remained unchanged for a period before they signed up for funding. She said there is also a lack of clarity over who will be granted permission to raise fees.

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“Providers have to sign up for next year before they can apply to increase fees and then there is supposed to be a demonstrable need for the increase, but it is not clear how [the department] decide if that need exists,” Ms Roy said.

“All business sectors need some sort of certainty and this is one that is vitally important for children, for their development and socialisation, and for their parents, so they can participate in the economy. It is welcome that there is a mechanism for a fee increase but even that maximum increase won’t bring providers back to 2024 market rates.”

Minister for Children Roderic O’Gorman last week confirmed a 15 per cent, or €44 million, increase to the core funding scheme as well as additional spending intended to expand capacity.

His department said “where a fee increase is approved, National Childcare [Scheme] subsidies will ensure that no increase in out-of-pocket costs will be felt by parents/guardians”.

The department said the fee increase mechanism will be announced in the coming weeks.