Parents could receive a 25 per cent reduction in childcare costs “within months” as ministers enter the final stages of budget negotiations.
Taxpayers will shoulder the burden of childcare costs from parents through increased subsidies as Children Secretary Roderic O’Gorman has promised to halve childcare costs for the next two households.
He’s now pushing for an increase in funding for his department, which would result in an average quarterly reduction in monthly childcare costs for parents in the upcoming budget.
The changes could come into effect “within months” of the Budget Day announcement and ensure a cut of almost €200 a month, according to senior government sources.
Coalition leaders have promised childcare will be a key focus in the upcoming budget to help families with mounting bills.
Ministers are aware that families are struggling with very high childcare costs and Taoiseach Micheál Martin has indicated on several occasions that there will be budgetary support to reduce these costs.
Nationwide, the average monthly childcare costs for parents are currently 750 euros.
However, it can cost upwards of €1,000 a month for parents in Dublin and other urban areas where some places are also in short supply.
Secretary O’Gorman is hoping to increase his budget allocations and will meet Public Expenditure Secretary Michael McGrath in the coming days.
In the 2022 budget, €221 million was allocated for “core” funding of services as part of a total investment of around €800 million.
Mr O’Gorman is understood to be aiming for a raise, but it is not clear how much higher that raise is.
Increased subsidies under the National Childcare Scheme (NCS) in the household reduce childcare costs for families.
Last September, crib providers froze their fees, and this year they are having to lower their prices due to increased government funding.
Previously, the subsidy was increased. Fees were not frozen, however, which increased costs.
The government is now hoping that last year’s move to freeze fees will result in the increased subsidy lowering childcare costs.
Around 4,000 or 90 percent of childcare workers have signed up for the program.
Yesterday the new collective agreement for crèche workers came into force, which means a five-step salary increase for employees depending on experience.
Around 70 percent of employees in the industry will experience a pay rise as a result of the deal.
Government sources hope lower fees for parents will come into effect “as soon as possible” and likely “within months”.
“There will be no immediate change on budget day as vendors will need time to complete administrative paperwork,” a source said. “But childcare fees are a big cost of living issue so we’re hoping it will be within months, but it’s hard to say if it will be before or after Christmas.”
It will be part of a double budget increase for families who are also in line for double child benefit payments, which will cost taxpayers 180 million euros.
Meanwhile, Housing Secretary Darragh O’Brien is pushing for the Help to Buy scheme for first-time buyers to be extended for at least another year.
Fine Gael also supports extending the tax incentive for people buying their first home by a further 12 months.
The Treasury Department this week received an independent review of the program from consulting firm Mazars, which also paved the way for an extension of the program for another year.
However, it also suggested that the tax stimulus should be scaled back in the coming years.
Under the program, first-time buyers can claim a 10% tax rebate up to a maximum of €30,000 on a new home purchase worth up to €500,000. The Mazars report suggested reducing tax refunds in the coming years.
However, this is not expected to be significantly reduced in the September 27 budget.
Mr O’Brien is also looking for means to expand the cost-rent system, under which the state offers leases to people based on their income.
A household with a combined income of €53,000 can apply for the program, which offers rental properties at rents 25 percent below market rate.
The properties are managed by approved housing companies.
https://www.independent.ie/irish-news/politics/budget-2023-childcare-bills-to-be-slashed-significantly-under-childrens-minister-roderic-ogormans-plans-41993257.html Budget 2023: Childcare costs are to be significantly reduced according to the plans of Children’s Minister Roderic O’Gorman