Childcare Cost Reductions – Dept response to query

by | Jan 5, 2023 | 0 comments

This post outlines the response from Minister O’Gorman’s office to a constituent comment regarding the adequacy of the new childcare cost and sector measures (enquiry Oct 5th 2022).

Response from Dept: Dec 30th 2022
On 15th September, the Minister launched Together for Better, the new funding model for early learning and childcare. This new funding model supports the delivery of early learning and childcare for the public good, for quality and affordability for children, parents and families as well as stability and sustainability for providers. Together for Better brings together three major programmes, the Early Childhood Care and Education (ECCE) programme, including the Access and Inclusion Model (AIM), the National Childcare Scheme (NCS) and the new Core Funding scheme.

Core Funding, which began in September, is the new funding stream worth €259 million in full year costs to start this partnership for the public good between the State and providers. Its primary purpose is to improve pay and conditions in the sector as a whole and improve affordability for parents as well as ensuring a stable income to providers.

Core Funding is distributed in a fair and reasonable manner that is related to services’ costs of delivery. Core Funding is allocated to services based on the number of child places being made available (whether filled or not), the age group of children for whom the places are available and the number of hours the places are available for, as well as the graduate qualifications of leaders in the service.  These are the primary drivers of services costs and this is therefore the most proportionate and transparent manner to allocate funding. It follows that service opening longer hours and operating more weeks in the year will receive more Core Funding. 

The majority of Core Funding is distributed based on a service’s capacity – the opening hours, opening weeks and the age group of children for whom services are provided as well as number of places available. This includes allocations for improvements in staff pay and conditions, for administrative staff/time, and a contribution to non-staff overhead costs. It is important to note that both contact and non-contact time, holiday pay, sick pay and other employer costs, are all factored in to the estimated staff costs allocation in Core Funding.

Additionally, there is an allocation to contribute to support graduates to be Lead Educators across ELC and to support graduates as Managers in ELC or combined ELC and SAC services. Heretofore funding has only been available in respect of graduate Room Leaders in the ECCE programme. The Graduate Lead Educator Premium in Core Funding is paid as a top up on the number of hours of provision that is led by a graduate. The Graduate Manager Premium is paid as a top up on the number of hours of operation of a service whose manager is a graduate.

Core Funding is calculated based on the hours that the service is open and available to children. However, non-contact time is factored into the base rate in two ways. Firstly, data from Sector Profile on current amount of contact and non-contact time for different grades of staff was used to build in an allowance for non-contact time into the allocation for staff costs. Secondly, there is a separate allocation for administrative staff/time.

The new funding model was designed with extensive stakeholder consultation and engagement, reports of which are published. Since Core Funding was announced last year as part of Budget 2022, the Department hosted numerous meetings of the Early Learning and Childcare Stakeholder Forum (ELCSF), and several Core Funding specific meetings with the ELCSF and provider representatives. This engagement continues as the new funding model is rolled out. 

Under Core Funding, the overwhelming majority of services will see an increase in their funding, most will see very substantial increases, and no services will see a decrease in funding if their circumstances remain the same.  ECCE services without a graduate lead educator will see capitation increase by at least 9.5% through Core Funding.  ECCE services with a graduate lead educator will almost all see increases in income, although it may be smaller proportionally given the significant level of funding available under the old funding model.  A very small number of services, approximately 60 of the over 4,100 signed-up, will see no increase with their income matched to 2021/2022. For this small number of services who do not experience an increase, a Funding Guarantee will apply. This will top-up Core Funding payments to match the difference in ECCE higher capitation and PSP from last year, provided they offer the same amount of graduate led provision as last year. 

Together for Better is about getting the most out of the three early learning and childcare programmes, and ensuring stability and sustainability in the sector. The Minister does not want any services to be faced with financial sustainability issues and is fully committed to working with any such service to support them in delivering early learning and childcare for the public good. There are supports, financial and otherwise, available to services who need them. Services that wish to deliver early learning and childcare for the public good will be supported to do so.   

Every effort is made to maintain up to date and relevant information on our website and to issue provider specific notices, presentations, and FAQs, to keep the sector informed, and ensure questions that are raised are being answered and addressed. Extensive additional information on Core Funding and the new funding model is available at: 

Further individualised support is available directly through the City/County Childcare Committees (CCC) who act on behalf of the Department.  This can include tailored information on the Department’s funding programmes, support with accessing online systems, and individualised case management supports to services that require it.  For specific queries or concerns in relation to Core Funding or any other of the Department’s programmes, please contact your local CCC who will be best placed to provide individual and confidential guidance and support. Contact details are available at:

From 2 January 2023, the minimum subsidy rate will be increased from €0.50 to €1.40.

‎For those in receipt of the Universal Subsidy, this will mean that they will see their subsidy increased from 50c per hour to €1.40.  For those in receipt of the Income Assessed Subsidy, this will mean that any family who is not already at the maximum hourly subsidy will see an increase in their subsidy.  All families with a reckonable income of €26,000 and above will see some level of increase. Those at €26,000 and below already receive the highest level of subsidy. The exact reduction in costs will vary depending on each family’s individual circumstances and childcare needs, see Latest News  · Applicant Portal (on  for details.

‎Core Funding allows for substantial increases in the total cost base for the sector, related both to pay and non-pay costs, without additional costs being passed on to parents. Participation in Core Funding means that fees cannot increase above September 2021 levels for Partner Services. Core Funding also requires Partner Services to offer the NCS and/or ECCE to all eligible parents to ensure that parents can avail of their full entitlement to subsidised provision. The combination of the fee freeze plus access to increased subsidies ensures improved affordability for parents which is particularly important in the context of rising prices for goods and services across the economy.

Budget 2023 allocates €1,025m to early learning and childcare – a clear demonstration from Government of the value of the sector. Together for Better aims to transform the sector and entails greater public management of the sector, including new conditions in relation to fees controls, quality improvements, and financial and operational transparency. The Minister is committed to working with Partner Services delivering early learning and childcare for the public good.  



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