I move: That the Bill be now read a Second Time.
I am pleased to have the opportunity to introduce the Childcare Support Bill 2017 to the Seanad.
In March the Bill completed its passage through the Dáil, following positive and constructive engagement with Deputies. There was cross-party support for the Bill, and cross-party collaboration on a number of amendments which have strengthened the Bill and resulted in the text you now have before you. I look forward to working with Senators to examine the Bill further over the coming weeks.
The cost of childcare places a huge financial burden on many families – especially on parents who are trying to get out of poverty, or who want to take up job opportunities or take part in education, but who cannot afford to do so because of the financial barrier of childcare fees.
The high cost of childcare is also a barrier to the participation of young children in high quality early care and education, which we know – from international research evidence – can make a lasting difference to children’s life-chances.
Making childcare more affordable for families will bring many benefits. It will improve outcomes for children. It will support parents to transition from welfare to employment, helping to make work pay, and supporting lifelong learning for parents.
It will advance gender equality, supporting women’s labour market participation and helping to close the gender pay gap. It will help to tackle child poverty, and support economic growth.
These benefits are why I am so proud of the progress we have already made in making childcare more affordable, and why this Bill is so important.
The Bill provides the legislative underpinning for a new Affordable Childcare Scheme which will replace all existing targeted childcare subvention schemes with a single, streamlined scheme; a scheme which will provide the framework for sustainably increasing public investment in childcare over the years ahead.
The Scheme will make childcare more affordable for parents by providing subsidies, which will be paid on the parents’ behalf to their chosen registered childcare provider. The provider must use the subsidy to offset the fees it charges parents.
The Scheme will provide both:
· income-related financial support (which targets support towards parents who face the greatest financial difficulty in affording childcare), and
· non-income related (or universal) financial support (which allows a level of support for all parents with children of a prescribed age who use registered childcare services).
The Bill also allows for additional support for families where there is an identified need for childcare on grounds of child development or child welfare, naming 5 statutory bodies that may make referrals for free or additional childcare support.
This, for me, is one of the most important aspects of the Bill, intended to help ensure we can meet the needs of the most vulnerable children and families- families who may be a long way from participation in the labour market and would otherwise benefit from only limited childcare support.
Benefits of legislation
The Childcare Support Bill marks the first time that any of our childcare funding schemes will have a statutory basis. The Bill is critical for good governance:
· It will establish clear eligibility and Scheme rules.
· It will create clear procedures, including an appeals process.
· And it will ensure that my Department and the scheme administrator have adequate powers to ensure that public funds are being used efficiently and to take action where public funds are misused.
Crucially, the Bill will enable the introduction of a streamlined, automated income-assessment process, providing a statutory basis for data-sharing between the scheme administrator, the Revenue Commissioners, and the Department of Employment Affairs and Social Protection.
This new income-assessment process will allow the targeting of childcare supports towards those with the greatest need – in particular families who are seeking to enter the labour market but have a low or moderate level of income.
It will allow us to move away from the current reliance on social welfare payments and Medical Cards as the only means of assessing financial need for childcare.
The IT-driven approach at the heart of the Affordable Childcare Scheme will also improve administrative efficiency and will streamline the application and registration procedures for both parents and childcare service providers.
My goal is the creation of a world-class system that is user-friendly for parents, efficient for childcare providers, and excellent value-for-money for the public exchequer and society.
While I am keen to introduce the Scheme as soon as possible, the IT system required is complex and I want to be sure that it is robust and long-lasting.
The development of the IT system, which is being carried out in close cooperation with the Office of the Government Chief Information Officer, is well under way.
A Request for Tenders for the IT development was published in January and the evaluation process is ongoing at present.
Earlier delays in relation to the IT system are regrettable. However, the improvements I introduced last September- involving the introduction of a universal childcare subsidy for all children under 3 years old and increases of up to 50% in the value of existing childcare subsidies- mean that more than 71,000 children and their families are already benefiting from increased childcare subsidies.
These important measures allowed me to fast-track some of the benefits of the Affordable Childcare Scheme, without comprising on the rigour and time needed to develop and launch this landmark new scheme.
Impact on quality
An important aspect of the Bill, and one that has so far been under-estimated, is its importance for raising quality standards in childcare. We know that childcare must be of high quality if it is to improve outcomes for children.
While the primary focus of the Affordable Childcare Scheme is affordability, the approach embodied by the Scheme reflects the international evidence that supply-side funding gives the Government greater leverage to improve quality standards than demand-side approaches such as tax credits. It does this in several ways:
· Firstly, the Bill limits participation in the Scheme to childcare providers that are registered with Tusla (including registered childminders), providing assurance that critical quality standards must be met by all providers in the Scheme.
· Secondly, all childcare providers who wish to participate in the Scheme will have to sign a contract with my Department, and Section 8 of the Bill allows quality conditions to be specified in the contract which are more rigorous than those required by the Early Years Services Regulations.
· Thirdly, the Bill allows for future development of the Scheme, with Section 13 allowing the possibility of quality-raising incentives to be built into the formula for determining how much funding the Scheme provides.
More broadly, the flexibility of the Bill allows changes to subsidy-rates over time, enabling Government to adjust the Scheme in response to the findings of the Independent Review of the Cost of Quality Childcare, as well as in response to the ongoing professionalization of the early years workforce.
If we are to support the move to a professional workforce with wages and working conditions that reflect the importance of the work carried out by early years educators, inevitably the cost of delivering childcare will rise over the years ahead.
Subsidy-rates will therefore have to rise too, if childcare is to remain affordable to parents.
Finally, in requiring all participating childcare providers to be registered with Tusla, I am very aware of the historical anomaly that school-age childcare remains unregulated.
To address this anomaly, last December I announced that I would introduce regulations later this year – in advance of the Affordable Childcare Scheme – to enable school-age childcare services to register with Tusla and thus participate in the Scheme.
In the first instance these new regulations will be limited to registration requirements. Work will then commence on the drafting of full regulations that will cover quality issues such as qualification requirements.
The Bill
Senators will recall that I published the Heads of Bill and General Scheme in January 2017. In February 2017 the Joint Oireachtas Committee for Children and Youth Affairs carried out Pre-Legislative Scrutiny.
The recommendations made by the Committee were very useful and have helped to shape the Bill that I am presenting today.
During the Bill’s passage through the Dáil, a number of important amendments were made to the Bill. I greatly appreciate the positive contribution of Deputies from all parties who worked together with me on those amendments.
I will now set out the main provisions of the Bill and, in doing so, I will briefly highlight some of the key amendments that have been made since the Bill was published.
Section 1 provides definitions of key terms. In particular, it ties the definition of “childcare service provider” to the list of registered providers maintained by Tusla, the Child and Family Agency.
Throughout the Bill the term “childcare services provider” therefore includes registered childminders.
I should also note that the definition of “parent” in the Bill includes a person acting in loco parentis and, therefore, includes guardians.
Section 2 provides for the establishment of the Scheme, to be funded out of monies provided by the Oireachtas each year, and states that the Scheme will be operated by the scheme administrator.
Sections 3 to 6 provide for the appointment of the scheme administrator and describe its functions and governance arrangements. Section 6 allows for the scheme administrator to outsource certain functions while retaining responsibility for administration of the Scheme.
Section 7 sets out the eligibility criteria for parents seeking to apply for financial support under the Scheme.
The residency requirements allow for applications, not only from parents who are ordinarily resident in the State, but also from EU and EEA citizens who are not resident in the State, and from other categories of parents who are formerly employed or self-employed in the State.
However, financial support will be limited to childcare services registered under the Child Care Act 1991, which must be located in the State.
Where parents are separated, Section 7 allows both parents to receive financial support, but each parent may only receive support for the days or times that he or she has care of the child.
Section 8 limits participation in the Scheme to “approved” childcare service providers, which must be registered with the Child and Family Agency (Tusla) and also have signed a contract with the Minister for Children and Youth Affairs to participate in the Scheme.
I assure Senators that the wording of the Bill provides that registered childminders will be able to take part in the Scheme.
Section 9 specifies the process by which parents may make applications for financial support, including the information they must provide.
When applications are for income-related financial support, in most cases the income-data will be gathered through an automated process involving the Revenue Commissioners and the Department of Employment Affairs and Social Protection.
Income data will be gathered with the consent of the applicant and on the basis of PPS numbers supplied by the applicant.
The Bill allows for the maximum number of hours of income-related financial support to vary depending on the parents’ participation in the labour market.
As a result, Section 10 requires employers, education and training providers to verify information provided by an applicant on their labour market status, when asked to do so by the scheme administrator.
Section 11 provides for the income-assessment process, which must use the definitions of “income” and “allowable deduction” in Schedule 1.
Section 12 specifies the information that the scheme administrator must provide to the applicant after determining the amount of financial support (if any) for which the applicant qualifies.
It also stipulates that a determination may be valid for 12 months at most, after which the application must be renewed.
Section 13 provides for the calculation by the scheme administrator of the amount of financial support for which an applicant qualifies, and sets out the factors to which the Minister must have regard when making regulations on the calculation of financial support.
Amendments made to Section 13 in the Dáil require the Minister, when making regulations on the number of hours of childcare to be subsidised, to have regard to parents’ availability to care for a child, and also to have regard to transition periods between work and study- that is, those brief but crucial bridging periods before a parent’s employment, self-employment or study commences, or after it ends.
Section 14 allows for additional support where there is an identified need for childcare on grounds of child development or child welfare. It builds on existing arrangements under the administrative schemes being replaced.
Additional support may take the form of higher rates of payment (e.g. provision of childcare at no cost to parents), or additional hours of financial support each week, or provision of financial support for children who would otherwise be too young or too old to participate in the Scheme.
This section allows for agreements between the Minister for Children and Youth Affairs and certain statutory bodies. The agreements will set out the procedures by which those statutory bodies may refer children for additional childcare support, as well as the additional support to be provided.
An amendment made to Section 14 in the Dáil requires the Minister and statutory bodies, when making those agreements, to have regard to the objective of stability for children attending childcare services.
Schedule 2 lists the relevant statutory bodies and the purposes for which they may make referrals. An amendment to Schedule 2 of the Bill strengthened the wording in relation to the purpose of referrals for childcare support from Tusla, which will be a key source of referrals for families in need of additional care.
Section 15 provides for procedures relating to the payment of financial support to approved childcare service providers, and for conditions to be prescribed in respect of those payments.
Section 16 requires an applicant to notify the scheme administrator if he or she is no longer eligible for financial support under the Scheme, or if he or she ceases work or study.
Section 17 allows for parents and childcare service providers to request reviews of decisions made by the scheme administrator. In cases where an application has been assessed through an automated process, a review allows a parent to request an administrative officer to examine the application.
A review is the first stage of the appeals process. This section also allows the scheme administrator to carry out reviews on its own initiative, for instance to verify information provided by a parent or by a childcare service provider.
Sections 18 and 19 allow the appointment of authorised officers who may enter the premises of childcare service providers in order to examine attendance records, financial records and other documents relevant to the Scheme, to ensure the proper use of public funds.
Section 20 establishes the appeals process which follows completion of the review process under Section 17.
The Minister’s consent is required for the appointment of appeals officers, and they will be required to be independent in the performance of their functions. Parents and childcare service providers will also have recourse to the Ombudsman, and to the High Court (on a point of law).
Section 21 allows the scheme administrator to recover money from parents and from childcare service providers, both in cases of fraud or misrepresentation and in cases of overpayment.
Section 22 amends the Child Care Act 1991. It addresses issues arising from the regulation of school-age childcare, which – as I stated earlier – will commence in 2018 in order to allow school-age providers to take part in the Scheme from the outset.
The amendments to the Child Care Act clarify the purpose of school-age childcare, and ensure that the definition of “school-age service” covers services for children up to the age of 15.
The amendments also set a limit to the number of school-age children for whom a childminder can care while remaining exempt from the requirement to register with Tusla.
Section 23 amends the Social Welfare Consolidation Act 2005 so as to refer to the Affordable Childcare Scheme as a “relevant purpose” for which specified bodies may share information on the basis of a PPS number.
This amendment will allow the Department of Employment Affairs and Social Protection to transfer information on an applicant’s income to the scheme administrator, on the basis of the PPS number provided by someone who applies for income-related financial support.
Section 24 allows the sharing of data between the bodies named in Schedule 3 for specified purposes, which include assessing an applicant’s income, registering a child, making payments, verifying children’s attendance, and carrying out a review, an appeal or the prosecution of an offence.
Section 25 describes the regulation-making powers under the Act.
Following an amendment made in the Dáil, Section 26 requires a review of the Scheme to begin twelve months after the first payments under the Scheme are made.
Section 27 allows beneficiaries of the existing administrative schemes to continue receiving the same level of financial support for a transitional period after those schemes are replaced by the new Scheme. This would arise in circumstances where existing beneficiaries choose not to move over to the new Scheme.
Section 28 provides for expenses incurred by the Minister in the administration of the Scheme to be paid out of monies provided by the Oireachtas.
Section 29 creates sanctions for persons guilty of offences under the Act.
Section 30 allows commencement of different provisions of the Act at different times.
I look forward to hearing the views of the members of the Seanad and to working with you to formulate the best possible legislation to help families in Ireland to access affordable childcare. I commend the Bill to the House.