Any schemes to reduce the cost of childcare for families must benefit middle-income earners as well as those on lower wages, Fine Gael sources have said. The Government is considering a radical new system of subsidised childcare from Minister for Children Katherine Zappone that would mean the State pays a portion of a family's bills directly to childcare providers. Ms Zappone has tabled the plan for inclusion in next month's budget.
It is likely, however, that the initial rollout of the income- tested scheme, expected to start next September, will focus on lower-income families. In some cases, they could see almost all of their childcare costs covered.
Fine Gael sources have, however, stressed that the so- called "squeezed middle" must also benefit, although it is acknowledged it will take a series of budgets to fully introduce the plan. During the term of the last government, Minister for Finance Michael Noonan defined the "squeezed middle" as those who earned between €32,800 and €70,000.
Childcare proposals
Taoiseach Enda Kenny and other Ministers were briefed on the outline of the childcare proposals earlier this week and an initial indicative figure of €47,000 income a couple was used – but sources stressed this was only an example and would not be the threshold that would apply when the plan was announced.
While a Fine Gael source said no final decisions had been made on the plan, it was claimed the “squeezed middle” had to be taken care of. “One cohort cannot be expected to pay for everyone else’s benefits. We are committed in general to looking after lower- and middle-income earners.”
It was acknowledged this was likely to take a number of budgets to implement. The plan will be designed in such a way that the level of subsidies can be easily increased or reduced should a government wish to do so.
Ms Zappone intends to introduce standardised regulations for all providers who want to participate in the scheme. Parents would log on to a website and provide their PPS numbers to see if they were eligible for subsidies and at what level they would apply. They would then choose a participating childcare provider. The State would pay the subsidy directly to the provider, with the parents paying the remainder.
Ms Zappone told RTÉ Radio that the subsidy would be higher for lower-income families and drop off as parental net income increased. "We start with those who need it the most," she said.
Fine Gael Dublin Rathdown TD Josepha Madigan said that while increased accessibility for those on low incomes was important, all families must benefit.
“The families in the squeezed middle who were hit hardest during the crash, paying for everything, are exactly the kinds of families who could benefit from a budget measure subsidising childcare, making it easier for them to go out and work.”
Unfair
David Quinn, the founder of the Iona Institute, claimed the plans as outlined were "unfair" on parents who cared for their families in the home. He said a CSO study from 2009 found that 80 per cent of pre-school age children did not use any kind of daycare. "Most of those who are not placed in daycare are looked after by a parent or another family member."
He said a poll commissioned by the Iona Institute in 2013, conducted by Amárach Research, found 17 per cent of respondents regarded daycare as the best option for children under the age of five. Half said the preferred option was to be looked after by a parent at home and a quarter thought it was best to be looked after by a family member such as a grandparent.
“Taking these figures together, it should be obvious that subsidising daycare at the expense of other options is emphatically not the way to go. The best alternative is probably a direct payment to all parents of young children, means-tested if need be, so that parents can then subsidise the choice that suits them best and not be directed towards one option only. The State must be neutral between daycare and other child-minding options.”
