Minister Foley announces new maximum fee cap for early learning and childcare services alongside €390 million in State funding this year through the Core Funding Scheme

Minister for Children, Disability, and Equality, Norma Foley, today announced the details of the new maximum fee cap for early learning and childcare services participating in Core Funding alongside record State funding of €390 million this year for the Scheme.

An initial maximum fee cap was put in place for new entrants to the scheme last year.

A new maximum fee cap will now be introduced for all new and existing services receiving this State funding this September, which will further lower the maximum fees that can be charged depending on the number of hours provided.

This will reduce costs for families who are facing the highest fees across the country in around 10 per cent of early learning and childcare providers. At the same time, State funding for early learning and childcare providers through Core Funding is being increased by €60 million for the forthcoming 2025/2026 period, bringing it to a record level of over €390 million.

Under these new maximum fee caps, the highest possible fees will be no more than €295 per week for a full day place of between 40-50 hours per week. This will bring these fees closer to the average weekly fee of €197 for full day care.

It is important to note that these fees for parents are then reduced by State subsidies under the National Childcare Scheme and the free, universal two-year Early Childhood Care and Education (ECCE) preschool programme.

A parent being charged the maximum permissible fee of €295 per week for a full day place would be entitled to receive the universal National Childcare Scheme subsidy of €96.30, meaning their own co-payment would be no more than €198.70 per week. Higher subsidies are available for many parents, depending on their level of income and the age and number of children in their family.

In addition to this a new maximum fee cap, the unprecedented funding available through Core Funding will ensure the existing fee freeze, which was introduced in 2022, will remain in place for participating services. This will continue to assist parents with children in the majority of services whose fees fall below the new fee caps.

The new maximum fee cap and increased State investment are important steps towards the government’s commitment to progressively reduce the cost of early learning and childcare to €200 per month per child during the lifetime of the government.

Minister Foley said:

Minister Foley today also shared the details for the Core Funding 2025/2026 allocation model, which makes over €390 million available from September 2025 to support providers in meeting higher costs without increasing fees charged to parents.

Overall, the 2025/2026 allocation represents an increase of over €60 million (over 18%) on the current programme year.

This additional €60 million allocation includes €45 million specifically ring-fenced to support the outcomes of the independent Joint Labour Committee process. 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.

The increased Core Funding of €390 million available from September facilitates:

• support for providers in meeting the costs of increases in minimum pay rates as a result of newly negotiated Employment Regulation Orders by the independent Joint Labour Committee
• increased funding for early learning and care capacity offered to ensure Partner Services can keep pace with rising costs without needing to increase fees charged to parents
• an increase to the minimum amount of funding a centre-based service will receive, increasing to €14,400 per year from the current level of €14,000
• a reduction in the maximum allocation for a service’s capacity to €450,000 to best spread a limited budget across the entire sector; and
• funding to support capacity growth of 3.5% across the sector

Last year, early learning and childcare services whose fees were frozen at a level that may not be sufficient to sustain their business were given the opportunity to apply for a fee increase. Last year, the planned extension of the fee cap from new providers to all providers in September 2025 was also signaled to the sector.

In addition to the increased Core Funding allocation of €390 million, any service facing sustainability concerns can continue to avail of supports through the Department of Children, Disabilty and Equality’s established case management process. This involves local City and County Childcare Committees and Pobal working together to assess and provide support including financial support to services experiencing difficulties.

For more information, please visit: Core Funding.

Core funding

Core Funding is one of five constituent funding streams for early learning and childcare providers which make up the State funding model for early learning and childcare, Together for Better.

1) Core Funding,

2) The National Childcare Scheme (NCS),

3) The Early Childhood Care and Education (ECCE) programme,

4) The Access and Inclusion Model (AIM) which provides extra supports for children with additional needs

5) Equal Start which provides extra supports for children at risk of educational disadvantage

Core Funding aims to improve affordability, quality, inclusion, and sustainability. The grant is provided to early learning and childcare providers toward their operating costs in return for services agreeing to comply with a number of conditions set out under the scheme, such as fee freezes, and financial transparency. Around 92% of early learning and care and school aged childcare providers who qualify for Core Funding have signed up to the scheme. They are known as Partner Services.

The maximum fee cap for 2025/2026

In Programme 2024/2025, maximum fee caps were introduced in September last year for Partner Services joining Core Funding for the first time.

Today’s announcement means that maximum fee caps will apply to all new and existing Partner Services from September 2025. Any fees above these caps will be lowered.

The introduction of fee caps for all Partner Services getting Core Funding contributes toward the long-term scheme goals of promoting affordability and accessibility for parents. A parent availing of 45 hours of care for their child, and who is also in receipt of the maximum NCS subsidy, will not pay any more than €198.70 out of pocket costs.

Further information on what these changes mean for providers and parents/guardians will be available under “What is Core Funding?” on the Core Funding webpage.

Table 1: Core Funding Fee Caps

How Core Funding is distributed to individual services:

Core Funding currently consists of three elements:

1. The Base Rate – Based on a service’s staffed capacity which considers their opening hours, operating weeks, age group of attendees, and number of places available. Places do not need to be filled, but the correct number of staff as set out in the regulations must be in place.
2. Graduate Premiums – Provide funding in support of graduate-led provision. The calculation is based on the number of graduate Lead Educators and graduate Managers in a service and the hours worked by these staff.
3. Targeted Measures – These are in place to channel additional State support towards small and sessional services such as a playschool, naíonra or Montessori. The targeted measures include a flat rate top up for sessional only services. There is also a minimum allocation for all centre-based early learning and care and/or school age childcare providers, regardless of how small they are. Finally, there is a maximum allocation, which caps the amount of overall State funding for the largest early learning and childcare providers

Table 2: Core Funding Base Rates (Hourly Rate Paid Per Place Hour)

Table 3: Graduate Premium hourly values to provide funding in support of graduate-led provision

Table 4: Targeted Measures annual values

The ringfenced €45 million fund for increased pay for early learning and childcare staff.

In Budget 2025, it was announced that €45 million would be made available for the 2025/2026 programme year of Core Funding 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 specifically ring-fenced for this purpose, and from September a new element of the grant calculation is being introduced to distribute this ring-fenced funding to Partner Services - the Staff Funding Additional Contribution.

The Minister expects that government funding secured to support the costs of increased minimum pay rates is used for its intended purpose and that any Employment Regulation Orders would utilise the full amount available, with a maximum of €1.14 payable per staff hour.

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.

Table 5: Impact of funding changes

Further information is available at Core Funding.

Numbers benefiting from the National Childcare Scheme

A record number of children – approximately 190,000 – have benefitted from the National Childcare Scheme this year.

Last September, the minimum rate for the National Childcare Scheme subsidy increased by 52 per cent.

This means that families using full-time early learning and childcare (45 weekly hours) now receive a minimum of €96.30 per week in universal subsidies per child, which can be up to €5,007 in subsidies off their annual bill per child.

New figures show that the number of children benefiting from the National Childcare Scheme between last September and May has increased by 17% on the same previous period to 189,716.

Higher subsidy rates of up to €5.10 per hour, or €229.50 per week, may be available under the National Childcare Scheme for families who choose to apply for an income assessed award. These rates, which depend on the family’s income, and the age of the child, mean that some families may not have to pay any contribution towards the cost of early learning and childcare for their child.