Government launches action plan toward €200 monthly childcare costs, with changes taking effect September 2026
Thousands of Irish families will receive increased childcare subsidies under changes to the National Childcare Scheme announced today by Children’s Minister Norma Foley.
The minister launched the government’s “Shaping the Future: Early Years Action Plan,” setting out a pathway toward the election promise of €200 monthly childcare costs per child. Foley expressed confidence the government will deliver on its €200 pledge within its lifetime.
The report commits to 2026 actions making services more affordable and accessible while improving quality. It outlines Phase 1 actions for 2026 and provides a framework for Phase 2 (2027-2029), with public consultation next year informing later-phase plans.
Achieving €200 monthly childcare costs will focus on Phase 2, following extensive public consultation. Foley previously acknowledged it will be a “long journey” to reach the €200 target.
A key measure, as flagged previously by The Journal, reduces costs for lower-income families by changing National Childcare Scheme income thresholds.
The NCS provides two subsidy types: a universal subsidy (not means-tested) providing €2.14 per hour for maximum 45 hours weekly, and an income-assessed subsidy based on family circumstances with rates depending on household income.
Currently, families receive full subsidies if income is below €26,000, with graduated subsidies available for incomes between €26,000 and €60,000.
The lower income threshold will increase from €26,000 to €34,000, while the upper threshold rises from €60,000 to €68,000.
Changes to the multiple child deduction element mean a family earning €68,000 would have reckonable income reduced by €11,000 to €57,000, qualifying them for higher graduated subsidies.
As fees lower, the Department expects demand to rise significantly and is working to increase supply. Core Funding for providers will increase to €482 million for the September programme year—a 23% increase—covering operational cost gaps from reduced fee revenue.
An additional €45 million in Core Funding is ringfenced supporting providers with possible wage increases resulting from Joint Labour Committee negotiations for new Employment Regulation Orders (EROs), which fix minimum pay rates and conditions in specified sectors.
Three EROs over the past three years, including October’s latest, have delivered minimum wage increases for early years educators and school-age childcare practitioners.
Foley told media that 93% of providers now avail of Core Funding—the highest since the scheme began. While acknowledging some providers exit the system, over 70% who left have returned.
“The whole purpose of core funding was to reduce the cost for parents in terms of introducing the fee cap,” she said, “but to do that, increasing monies are being given to the providers to make that work.”
Foley identified three priorities: lowering fees, increasing supply, and ensuring quality across all services and providers.
An accompanying Action Plan for Simplification streamlines administrative processes, develops an overarching framework for most providers, and enables “once only” data capture.
Plans include a single, long-term Childcare Identifier Code Key (CHICK)—showing a child’s approved NCS subsidy—rather than annual renewal.
Changes take effect September 2026 at the new early learning programme year’s start, with government estimating nearly 47,000 families will benefit from additional subsidies.
The announcements address persistent childcare affordability challenges, with Ireland’s costs among Europe’s highest. Parents have protested demanding government fix the “broken” childcare system amid low provider pay and insufficient places.
The phased approach toward €200 monthly costs reflects the complexity of simultaneously reducing parent fees, ensuring provider viability, improving educator wages, and expanding capacity—all requiring substantial ongoing public investment.