Child daycare allowances are set to be increased and widened, Jason Hayward, the Minister of Economy and Labour, told MPs yesterday.

A new three-tier income band system is being introduced to make more parents eligible for the scheme, under legislation tabled in the House of Assembly.

Households with a gross annual income of up to $65,000 will be able to apply for a maximum monthly allowance of $900 per eligible child.

For those earning up to $97,000, it will be $700 a month per child, and households with an income of up to $130,000 will be able to seek $500 per child.

At present, only households earning $55,000 or less qualify for the scheme and receive $800 per child per month.

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CHILD DAY CARE ALLOWANCE AMENDMENT ACT 2023.pdf

Mr Hayward said the existing allowance levels did not reflect adequately the rising cost of childcare, for which he blamed the Covid-19 pandemic.

The minister said that the way the present system was structured meant that it was more financially beneficial for some people not to go to work, but instead stay home and look after their child rather than access professional daycare.

Mr Hayward said: “The impact of the global pandemic means that like all other businesses, the cost of operating child daycare services in Bermuda has increased, resulting in added financial pressures being placed on families.

“The increasing cost of childcare has added to the economic stresses for parents.

“As a result, the ministry will increase the childcare allowance benefits and expand the pool of parents who can qualify.

“Ensuring families have access to childcare is extremely important as it gives children the opportunity to develop the social, emotional and cognitive skills required to prepare for primary school and beyond.

“The inability to afford childcare may inadvertently force parents to opt out of going out to work and instead choose to stay at home.

“Subsequently, staying home to care for one’s child could prove to be a more suitable and beneficial option for some families.

“Government acknowledges that families are finding it difficult to meet the needs of their households, particularly with respect to ensuring their children are provided access to daycare services in alignment with what they can afford.”

Mr Hayward said the new system was flagged in the 2022-2023 Budget.

The minister put forward the Child Daycare Allowance Amendment Act 2023 for its first reading in the House of Assembly.