Core Funding Budget and Services Allocations

The Minister secured additional funding of nearly €20 million in Budget 2025 for Year 4 of Core Funding. This brings the full year budget for Core Funding Year 4 to a minimum of €350 million.

This significant increase allows for important enhancements to Core Funding, making further progress on the objectives of the scheme. Core Funding will continue to contribute to improved affordability, quality, accessibility, and sustainability. The scheme supports the partnership between providers (Partner Services) and the State that reflects the importance of early learning and childcare in serving the public good.

The additional allocation of close to €20 million includes:

• Over €7 million to support Partner Services in meeting costs whilst maintaining the fee freeze, and;
• Over €11 million to support natural growth in the sector, allowing for 3.5% growth in capacity.

In addition, a maximum of €45 million in State funding to support services to meet costs of increased minimum rates of pay in the sector will be made available to services from September 2025 onwards. This maximum of €45 million is contingent on the establishment of new minimum rates of pay in the sector through updated Employment Regulation Orders.

The majority of Core Funding is distributed to services via the Base Rate, which is based on a service’s staffed capacity – the opening hours, operating weeks, the age group for whom services are provided, and the number of places available. Places do not have to be filled in order to be allocated Core Funding, but for capacity to be funded, there must be enough staff in place to satisfy the minimum staff-to-child ratios.

The table below shows how much a service will receive per hour for each place the service has available for parents to use throughout the day.

Core Funding also pays premiums for graduate employees. Since its introduction in 2022, the scheme has paid an additional €4.44 per hour for both Graduate Lead Educators, and Graduate Managers.

There are targeted measures available through the scheme to support smaller and sessional only services. These include a Flat Rate top up payment for sessional only services of €5,000, and a minimum base rate allocation of €14,000 in year 3, which is increasing to €14,400 in year 4.

In Budget 2025, it was announced that €45 million would be made available for the 2025/2026 programme year of Core Funding. This funding is ringfenced to support Partner Services in meeting the cost of increasing rates of pay as a result of any outcomes of the independent Joint Labour Committee negotiations This funding is contingent and conditional on new Employment Regulation Orders being agreed by the Joint Labour Committee. The Joint Labour Committee is made up of employer and employee representatives from the early learning and childcare sector who can negotiate minimum pay rates, which are then set down in Employment Regulation Orders to improve pay for the 37,000 staff in the early learning and childcare sector.

This funding will be introduced in programme year 4 through a new element of the scheme - the Staff Funding Additional Contribution - with a maximum hourly rate of €1.14 payable.

The release of this funding, and the hourly rate at which it will be paid out is contingent on the establishment of updated Employment Regulation Orders by the independent Early Years Services Joint Labour Committee. This funding will take effect from 1 September 2025, or the date Orders are given effect, whichever is the later.

More details can be found on the year 4 provider’s document.