From Department of Children, Equality, Disability, Integration and Youth
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Minister for Children, Equality, Disability, Integration and Youth, Roderic O’Gorman, has today welcomed that so far, 92% of Early Learning and Care (ELC) and School-Age Childcare (SAC) providers have agreed to operate a freeze on parental fees by coming into contract for the Transition Fund.
Effective between 2 May and 31 August 2022, the Transition Fund will be paid to all participating providers to ensure no increase on parental fees from the September 2021 rates.
The Fund is designed to support the stability and sustainability of services in the interim period between the end of the Employment Wage Subsidy Scheme and ahead of the introduction of the new Core Funding Scheme in September 2022.
This stability of fees ensures the full affordability benefits of the National Childcare Scheme (NCS), and the universal Early Childhood Care and Education (ECCE) Pre-school Programme are felt by parents.
Speaking today, the Minister said:
“I am delighted that in return for this investment, the vast majority of parents will benefit from the operation of a fee freeze. Parents should feel confident and reassured knowing that in services participating in the Transition Fund, their ELC and SAC fees will not increase. This is the beginning of fee management that will now make it possible for substantial future investment to reduce parental fees over time. This begins next September with the new extension of the universal NCS subsidy – worth up to €1,170 per annum - to all children up to 15.”
The Minister continued:
“I am encouraged that providers have shown a real willingness and openness to work in partnership with the State towards the shared goal of delivering high quality and affordable ELC and SAC for families, for the public good. The high uptake of the Transition Fund bodes well for the future of the sector as we move towards greater public investment and public management, and the introduction of Core Funding in September.”
Providers who have not yet signed up can still do so. Remaining providers can still sign-up for the Transition Fund and receive income based on a weekly value of a proportion of their calculated income capacity.
The willingness of ELC and SAC services to engage in this new type of partnership is also evident in the high numbers that have now completed the Annual Early Years Sector Profile. 83% services have now responded to this important survey, which is a first step in applying for the new Core Funding scheme. There have also been a number of enquiries from services who have not been able to complete the survey in advance of the 9th May deadline and the survey will reopen next month in advance of the Core Funding Scheme application to allow additional providers to complete the survey in order to apply for the major new funding stream.
Further detail and an FAQ on the Transition Fund and Core Funding is available here.
Providers can apply for the Transition Fund on the Early Years Hive.
Providers and parents are encouraged to contact their local City/County Childcare Committee if they have any questions relating to the Transition Fund, Core Funding or the operation of the fee freeze.
The Transition Fund is intended to provide financial support to Early Learning and Care (ELC) and School Age Childcare (SAC) providers in the period of time between the end of the Employment Wage Subsidy Scheme in April and the introduction of the new Core Funding from September.
The Transition Fund will make a payment to providers in respect of the weeks they are open between 02 May and 31 August 2022. The primary conditionality that services must agree to in order to access the funding is that their fees should not increase above those which were charged in September 2021. Services will also be required to be on the Tusla register and be contracted to provide one or more of the DCEDIY funding programmes on 1 February 2022 in order to avail of the Transition Fund.
A weekly value has been determined for each service based on 7% in their calculated income capacity. The income capacity for a service has been calculated based on:
Services are eligible for the Transition Fund if they meet all of the following criteria:
The ‘calculated-income-capacity’ of the service is determined by the following formula:
Until April 2022, Early Learning and Care and School Age Childcare employers continue to be eligible to access the Employment Wage Subsidy Scheme (EWSS) without having to demonstrate the reduction in turnover which is required of other employers.
EWSS has provided very substantial investment in the sector since August 2020.
Between October 2020 and November 2021, the enhanced rate of EWSS equalled approximately €34 million, per month for ELC and SAC employers, estimated to cover, on average, 80% staff costs or 50% total normal operating costs.
For February 2022, the original two-rate structure of €203 per week and €151.50 per week applied; this amounted to approximately €22 million per month for ELC and SAC employers, covering, on average, 50% staff costs or 38% total normal operating costs.
For March and April 2022, the flat rate subsidy of €100 per week will apply; this amounts to approximately €11 million per month in the sector, and will cover, on average, 25% staff costs or 11% total normal operating costs.
From September 2022, Core Funding starts a multi-annual investment plan in the new funding model and is part of Government’s commitment to realising the First 5 target of investment of at least €1 billion by 2028.
Recommended by an Expert Group and approved by Government, Core Funding introduces a strategic way of funding the sector and begins the transformation of the sector to one that is increasingly publicly funded and publicly managed, delivering a service for the public good, through a partnership between the State and providers, to the benefit of children, parents, educators and practitioners, and society overall.
Core funding will be worth up to €73.5 million in 2022 and up to €221 million in a full year from 2023 on.
Core funding will continue the requirement not to increase fees to parents from the September 2021 rates.
The report of the Expert Group to develop a new funding model, ‘Partnership for the Public Good’, is available, along with all related materials, including information and reports of extensive stakeholder consultation, on the First 5 Funding Model website.