From September, childcare fees for parents paying the highest rates will be capped at 295 euro per week.
With the National Childcare Scheme subsidy, many parents will effectively pay around 198 euro, closer to the national average of 197 euro.
The cap applies to full-day care of 40 to 50 hours, while funding for the sector will also increase.
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Minister for Children and Kerry Fianna Fáil TD, Norma Foley, says some parents are forking out 400 euro a week:
