2868. Deputy Grace Boland asked the Minister for Children, Disability and Equality whether consideration is being given to expanding the Graduate Lead Educator Premium, or introducing an alternative funding mechanism, to better recognise and support graduate qualified educators where more than one graduate is working within the same early learning and childcare room; and if she will make a statement on the matter [60504/26]

Pay is one of a number of challenges impacting the early learning and care and school-age childcare workforce. The level of pay for early years educators and school-age childcare practitioners does not reflect the value of their work for children, families, society and the economy.

Although the Government is the primary funder of the sector, it is not the employer and cannot directly set wages or conditions for any staff in the sector.

The Joint Labour Committee is the formal mechanism established by which employer and employee representatives can negotiate minimum pay rates, which are set down in Employment Regulation Orders, and is independent in its functions.

Since September 2022 when the first Employment Regulation Order was enacted, the minimum hourly rate of pay for Graduate Lead Educators has increased by 13% to €17.50 per hour.

The Government has ringfenced up to €45 million in Core Funding for Programme Year 2025/2026 to support employers to meet the costs of increasing rates of pay due to new EROs. This is distributed to providers through the Staff Funding Additional Contribution (SFAC) grant.

For programme Year 5, September 2026/2027, an additional funding allocation, up to €45 million has been secured to support providers in meeting the costs of possible further increases in wages which may be negotiated by the independent Joint Labour Committee. A second grant referred to as the Staff Funding Additional Contribution 2 (SFAC 2) has been designed to distribute the new funding rate. This allocation will be released once new EROs are agreed. This funding is ringfenced for staff pay and conditions, and therefore this portion of a Partner Service’s grant under Core Funding must be used for this purpose only.

In addition, Partner services receive a Graduate Lead Educator Premium and Graduate Manager Premium payment at the hourly rate of €4.44 in respect of their graduate-led ELC provision.

The calculation of a service’s Core Funding grant contains multiple elements – the Base Rate, Graduate Premiums (including the Graduate Lead Educator Premium and the Graduate Manager Premium), Targeted Measures and the Staff Funding Additional Contribution.

The Graduate Lead Educator Premium, which pays out a rate of €4.44 per graduate-led hour, supports the employment of graduate staff. The premium is paid for every hour that an Early Learning and Care (ELC) or combined ELC/School Age Childcare (SAC) session is led by a graduate Lead Educator.

In the fourth year of Core Funding, the cost of supporting the Graduate Lead Educator Premium is anticipated to amount to c. €47.5 million – which accounts for almost 12% of the overall year 4 Core Funding allocation.

These allocations are underpinned by the graduate staff in lead educator roles in a given service and are paid directly to the Partner Service as part of their overall Core Funding grant allocation. It is at the discretion of the Partner Service as to how their Core Funding grant is utilised, provided the purpose conforms to the approved areas of expenditure as set out in the Core Funding Partner Service Funding Agreement.

In addition, the increased allocation secured in Budget 2026 includes up to a maximum of €45 million to facilitate improved pay for early years educators and school-age childcare practitioners through enhancement of the Employment Regulation Orders in Year 5 of the scheme. Costs related to Graduate Lead Educators will be included in this allocation, which will be released once new Employment Regulation Orders are established.

Since the Core Funding scheme was introduced, its effectiveness has been subject to ongoing assessment, which has facilitated the iterative evolution of this scheme. The introduction of Core Funding in 2022 brought a significant increase in investment for the sector, with €259m of funding paid directly to services in year 1 of the scheme, of which €210.8m was entirely new funding. Core Funding has seen consistently increased State investment to the sector year on year and is set in the upcoming programme year to be worth over €480 million. This is an increase of over 86% since the scheme began in September 2022.

The annual changes to the allocation model and in the conditions attached to the funding has ensured the Scheme remains responsive, balancing the needs of providers while seeking also to meet a range of other objectives. Among these objectives is ensuring taxpayers’ money is being used in a way that sustains services while not excessively increasing their private profit.

The Department will explore further changes based on the operation of year 5 of the Scheme as well as stakeholder input and income and cost data from providers.

The Department will continue to engage with the sector and continue to develop the scheme so that it can continue to see the high uptake levels it has seen this year, and indeed since it was launched in 2022.

I recognise that supporting the workforce is essential to ensuring quality in early learning and childcare. This funding will help to make further progress on improving pay while maintaining the strong partnership between the State and providers.