Government schemes aimed at making childcare more affordable in Ireland have become a financial burden for parents as providers withdraw from the core funding programme and impose hefty fee increases.
In the past two years, 51 childcare providers have exited the government scheme, with some charging fees up to €300-€400 more per month. The withdrawals come four years after the scheme was implemented to improve childcare affordability.
Childminders typically charge €5 to €8.50 per hour per child, while crèches and daycare centres charge around €12 to €15 for services including food and nappies. Nanny and home care services cost between €11 and €20 per hour, with the government subsidizing only €2.14. Parents with no income receive subsidies of around €5.
The government has frozen provider fee increases since September 2021, requiring subsidised providers to seek permission from the Department of Children before raising fees. Last year, 20% of applicants—850 institutions—received approval for fee increases.
From September this year, the government introduced new maximum fees for institutions under the Core Funding Scheme based on hours of care provided. More than 4,200 childcare institutions currently participate in the scheme.
Growing Crisis
While the number of withdrawals is relatively small, the problem is acute in areas with few childcare options. An estimated 77,000 children are currently on waiting lists for childcare nationwide. Experts warn that continued closures will leave more children unable to access services.
Providers say government grants are insufficient to cover costs, forcing some to close. Others abandon the scheme to increase fees without restrictions, shifting the financial burden entirely onto parents.
Two providers left the government scheme in 2022/2023, 24 in 2023/2024 and 25 in 2024/2025. Most withdrawals have occurred in Dublin, where childcare fees are already among the country’s highest. Providers in Cork, Galway and Wicklow have also exited, with some closing facilities while others sharply increased fees.
Unsustainable Model
Elaine Dunne, chairperson of the Federation of Early Years Childhood Providers, said the government’s hope of providing services at much lower cost is unrealistic without adequate investment. She predicted that provider withdrawals from core funding will continue and that the government’s election promise to reduce childcare fees to €200 per month will never be fulfilled.
Labour TD Mary Sherlock said many providers tried to remain in core funding but abandoned the plan because it proved financially unsustainable. She noted that parents have no alternative options.
Some Dublin institutions have increased weekly fees from €190 to €300, bringing monthly costs to €440. Parents face difficult choices: quit their jobs to care for children themselves or continue working while paying higher fees.
There are allegations that some childcare institutions are making substantial profits from fee increases, but the government has been unable to control pricing. The Department of Children said the decision to withdraw from core funding is regrettable, noting that 84% of institutions continue with the scheme.
Figures show that full-time childcare for children under two years old now costs more than €490 per month in many areas.