Budget 2027: Proposed childcare package could save some parents €1,000 a year

Discussions on the cost of childcare dominated the leaders’ meeting in Government Buildings throughout Sunday.

A “significant” childcare package for children aged six and under is expected to be unveiled as part of Tuesday’s budget, which could see parents of younger children save at least €1,000 a year.

Discussions on the cost of childcare dominated the leaders’ meeting in Government Buildings throughout Sunday.

The Irish Examiner understands that while negotiations are still ongoing, “good progress was made” on childcare costs.

It is expected that there will be an increase to the National Childcare Scheme, with emphasis on children aged under five in early years education, as well as Junior and Senior Infants who require more hours in childcare than older children.

It is hoped that parents will save at least €1,000 over the course of the year in fees for children in this cohort, with negotiations expected to continue on Monday to determine the exact fees and savings.

The change will take effect from next September, to allow the systems to work out how to differentiate between age groups.

Sources told the Irish Examiner that the highest costs are borne by parents with younger children, and this is why the Government decided to target this group.

There should, however, be some cuts to childcare costs for parents with older children as the maximum fees chargeable by providers are also expected to be cut. This will also benefit primary school children attending after-school care. 

There will also be funding for another wage increase for early years educators, it is understood.

The coalition leaders — Taoiseach Micheál Martin, Tánaiste Simon Harris, and minister Sean Canney — met with public expenditure minister Jack Chambers in Government Buildings for several hours on Sunday, with items including tax, childcare, and social welfare all on the agenda.

Social Protection package

The Social Protection package, meanwhile, is expected to see an increase of €10 per week for pension and unemployment benefits but was still being negotiated on Sunday evening.

A weekly increase of €5 to the fuel allowance is also likely to be announced on Tuesday rather than a lump sum payment, as had been reported in other newspapers earlier this week. 

The Irish Examiner understands that there was a fear that a lump sum payment for fuel allowance would be quickly swallowed up by rising prices, and that delivering an enhanced monthly payment would be more sustainable.

As reported by this newspaper earlier this week, a €500 cost-of-disability lump-sum payment will be paid rather than a monthly allowance.

The tax package was still being discussed on Sunday evening.

Speaking at the Fianna Fáil Cairde Fáil gala dinner in Dublin on Saturday evening, the Taoiseach suggested that the Government was leaning towards halting carbon tax increases on kerosene for the rest of the Government’s term in office.

“In respect of the home heating dimension of the carbon tax, yes, that's the direction of travel [to stop increases in this term of Government],” the Taoiseach confirmed.

“Although, and again, there's a limit to that in terms of its impact. But yes, we are conscious of home heating this winter, and given the nature of the crisis now, the view is that there is no real sign of an easing of the pressure on energy.” 

However, speaking on RTÉ Radio 1’s This Week, foreign affairs minister Helen McEntee urged caution over the proposal.

“When it comes to things like carbon tax, you know this suggestion that we can completely scrap carbon tax — it doesn't actually get rid of pricing,” she said.

“What it does potentially is send money off to the EU. We will maintain funding that we can reinvest back into that type of adjustments and changes that people need, be it in their homes, be it in renewable energy or renewable sources.” 

Several departments settled their budgets over the weekend, including the Department of Transport. The Irish Examiner understands significant funding for public service obligation (PSO) public transport routes and services will deliver funding for over 140 new services in 2027.

As defence minister, Ms McEntee secured funding for 400 Permanent Defence Force recruits, and almost 100 new civilian staff.

It is also expected that there will be a “significant increase in non-pay current expenditure” to support modernisation and improve conditions for Defence Force personnel.

Justice minister Jim O’Callaghan, meanwhile, received money to recruit 1,000 new gardaí, as well as additional funding for the International Protection Office.

• Louise Burne is political correspondent with the Irish Examiner.