Minister O’Gorman announces substantial investment for Early Learning and Care and School-Age Childcare providers in return for a fee freeze for parents

Minister for Children, Equality, Disability, Integration and Youth, Roderic O’Gorman, has today (April 7) announced the opening of the Transition Fund for Early Learning and Care (ELC) and School-Age Childcare (SAC) providers.

The Transition Fund will provide up to €6.4 million per month to services for the period of time between the end of the Employment Wage Subsidy Scheme (EWSS) in April and the introduction of a strategic new approach to funding the sector from September, Core Funding.

In return for an agreement that fees will not increase above those which were charged in September 2021, this substantial level of funding will be offered to providers. Services that have increased their fees above September 2021 rates will be required to reduce them to September 2021 rates or below in order to qualify for the funding. This means that parents will not be faced with fee increases, and the full affordability effects of the National Childcare Scheme, and the universal Early Childhood Care and Education (ECCE) Pre-school Programme, will be felt by parents.

A weekly value has been determined for each service based on 7% of their calculated income capacity. Providers will complete a simple application form to access the funding. Transition Fund payments will be made in respect of the weeks services are open between 2nd May and 29th August 2022. The funding will support providers following the withdrawal of the EWSS in advance of the transition to the new funding model from September.

Speaking today, the Minister said:

“One of my top priorities in Government is to improve affordability of ELC and SAC for parents and I am delighted to be delivering on this commitment linking increased investment in the sector with clear benefits for parents. The introduction of the fee freeze through the Transition Fund begins a significant shift in our approach to fee controls by working in partnership with providers to deliver high quality and affordable ELC and SAC for families, for the public good. Importantly, the funding ensures the stability and sustainability of services as they exit the EWSS and transition to the new funding model which will see substantial additional investment in services.”

An application form to access the Transition Fund will be open for providers from Thursday, 7 April. Further detail and an FAQ will be available here.

Providers are encouraged to contact their City or County Childcare Committee (CCC) if they have any questions relating to the Transition Fund.

Notes to the Editor

Transition Fund

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 2nd May and 29th 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 February 1st 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

The service location, size and service type specified in the Tusla register from January 2022
Data on the corresponding service types (e.g. sessional/ part time/ full time/ school age and whether they are a community or private service) from the Annual Early Years Sector Profile
Average occupancy information.

Services are eligible for the Transition Fund if they meet all of the following criteria:

The service must be Tusla-registered.
The service must have at least one child registered on a DCEDIY funding scheme on 1st February 2022.
The service must be open for at least one of eighteen weeks between 2nd May and 29th August.
The ‘calculated-income-capacity’ of the service is determined by the following formula:
Maximum number of children the service can accommodate (as specified on the Tusla Register)
x 83% (to reflect the average normal occupancy level, which takes into account both vacancies and the extent to which a place is only used part of the week, e.g. 4 days per week)
x The average weekly fee in the county in which the service operates for the service type (distinguished by private/community, and session-type), as recorded in the Pobal Annual Early Years Sector Profile for 2021.
x 7%

Employment Wage Subsidy Scheme (EWSS)

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.

Core Funding

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 here.