Nearly 900 childcare providers approved to raise fees despite State funding

For the programme year of 2024/2025, the Department of Children received up to 1,145 fee increase applications.

Nearly 900 childcare providers within the Government's funding system have increased their fees this year, latest figures show.

Childcare providers which, as part of the Government’s core funding model, have been prevented from increasing their prices in recent years, can apply for a fee increase assessment if their fees were “frozen at a level that may not be sufficient to sustain their business, even with the increased funding available through core funding”.

The Department of Children told the Irish Examiner over 20% of providers had been granted an increase and that the number was higher than the previously reported 850, due to appeals.

For the programme year 2024/2025, the department said 1,145 fee increase applications were received and, “inclusive of appeal outcomes”, 898 services that applied were approved to increase at least one fee. This represents 78.7% of all applicants to the fee increase assessment, and 20.2% of all partner services in core funding.

The 2024/25 increases lessened, or in some cases wiped out, the benefits of an increase in the national childcare subsidy which kicked in last September — the second half of a plan by then children’s minister Roderic O’Gorman to cut fees by 50% — as providers argued that rising costs had meant that frozen fees were unsustainable.

Balance of needs

The department said core funding partner services that were charging fees below the county average were eligible to apply to be assessed for a fee increase, and that the process “balanced the need of parents for stability with their early learning and childcare costs and the need for providers to operate viable businesses in order to continue providing this public good service for their community”.

The department said if a service has fees that support their expenditure by more than 15.18%, they were not granted permission to increase. 

It said: “The process sought to begin addressing disparity within the sector, with some services having been frozen at much lower rates than others following the introduction of the fee freeze in 2021. The county thresholds served to identify these services that may have been frozen at particularly low levels.”

County thresholds were published last July and were based on the average fee being charged in each county. To be eligible for a fee increase assessment, the childcare provider had to list at least one fee below their county threshold.

According to figures from the Department of Children, the highest average fees being paid at the moment is in the Dún Laoghaire-Rathdown area of Dublin at €258.

The department said even once accepted into the process, the childcare service “still needed to demonstrate an objective need to increase their fees”, with only those fees which fell below the thresholds being assessed for an increase.