Confusion over Government plans to bailout childcare sector

Confusion over Government plans to bailout childcare sector
Minister for Children and Youth Affairs, Katherine Zappone. Photo: Rollingnews

There is confusion over the Government’s plan to bailout the childcare sector after it emerged that all of the State’s current schemes are to be stopped for the duration of the emergency action.

At present the State operates a number of schemes, including the more recent National Childcare Scheme, which sees childcare operators reimbursed for subsidies being offered to parents.

Many childcare businesses had written to parents on the back of the Covid-19 crisis requesting that they continue to pay their childcare fees despite not receiving any service in return, in order to maintain those businesses as going concerns.

Early reports regarding the bailout had suggested that the State schemes - which many operators not asking parents to continue payments had hoped would keep them afloat - would run in parallel with the new bailout programme.

It has now been confirmed that this is not the case.

What this means in effect is that while a creche’s staff will be almost fully paid throughout the crisis, the business itself will have just 15% of those staff costs provided in order to manage its overheads - which would see businesses with large mortgages for example in dire financial straits.

It is unclear when the State schemes will cease, but it is understood that the Department of Children and Youth Affairs wishes for this to happen in the immediate term.

The bailout is obviously great for parents, but it’s not enough,” said Marian Quinn, chairwoman of the Association of Childhood Professionals (ACP).

Ms Quinn acknowledged that it is “unseemly” for businesses to ask parents to pay for services that aren’t being provided, but said that whether or not a childcare business can stay afloat in the current circumstances depends on how badly it will affect them financially.

“The Government will provide 15% of what your wage bill is.

"If that accounts for 80% of your overheads then it may be helpful. If staff costs are only 60%, or lower, though, then obviously less money will be received.”

“Everyone was prepared to take a hit during this, but it’s all well and good paying staff, we need the providers to survive also,” she said.

There is also a deal of confusion regarding the Department’s messaging on the subject of the bailout.

On Tuesday, it told providers that it would pay a retention top-up payment to ensure that all workers in the sector earn €350 per week minimum.

The following day that statement had been altered to state merely that the Department will “pay a retention top-up designed to retain staff in the sector”.

The Department of Children and Youth Affairs referred the Irish Examiner to today’’s press release when queried as to the specifics of the new deal.

That deal itself will see Revenue reimburse childcare employers with 70% of their staff bill, with the remaining 30% to be paid by the Department of Children.

The conditions for the deal are that providers must not charge parents for childcare while the Covid-19 crisis persists; must reassure parents that their children’s places are safe; and must reinstate staff that have already been let go.

The emergency measures are designed to last for a maximum of 12 weeks. 

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