Thousands of working families are to miss out on a promised childcare subsidy of up to €48-a-month because they are "unknown" to the social welfare system.
Delays in the development of a new computer system and the fact that Revenue is not in a position to share income data on working parents with the Government means the much-heralded Affordable Children Scheme (ACS) cannot be fully rolled out.
As a result, around 9,000 families will lose out because they are not already dependant on some form of social welfare.
Children's Minister Katherine Zappone is unable to say when the problem will be resolved but it will be next year at the earliest.
From September, a new universal childcare subsidy will kick in for 33,000 children aged between six months and three years. For children in full-time, registered childcare, it will amount to €1,000-a-year.
A second element of the €19m scheme will see 70,000 families with children up to 15 years old and a net income of less than €47,500 get a means-tested subsidy from the State.
These payments will be tapered depending the age of the child, number of hours in childcare, and income of the parents.
However, it has emerged that another 9,000 families who would have expected to have State support on the back of last October's budget announcement will not now benefit.
Based on the Budget Day promises, they could have expected up to €12-a-month.
"We are not quite there yet because we were not able to finish building one of the most complex IT systems going," Ms Zappone said, adding that once completed it would be in place "for generations to come".
"There will be some children, though it's not a very big number, that will not be able to receive the size of subsidy that we had hoped."
She said Ireland is "moving from one of the most expensive childcare systems in the world to the best".
Asked whether families who miss out now might receive back payments once the system is working, Ms Zappone replied: "We're going to explore how we can get the money to them as soon as possible and that will be a question as part of that."
Social Protection Minister Leo Varadkar admitted the parents affected are likely to be working, rather than already reliant on social welfare.
"It's certainly not as we intended it when the announcement was made some months ago," he said.
Mr Varadkar added that the scheme is a "very major step forward and you have to start somewhere".
The families who will benefit from the additional subsidy will already be in receipt of social welfare payments or in possession of a Medical Card or GP Visit Card.
"The group of children who will not benefit until we have the full system available are from families who are at the higher end of the income threshold that we identified," Ms Zappone said.
A spokesperson for the Department of Social Protection said it is "well positioned" to share its data with the Department of Children once the scheme is finalised.
However, legislative changes will be necessary to allow Revenue to share its data.
The ministers could not give a date for when this would be brought to the Oireachtas.
Fianna Fail children's spokesperson Anne Rabbitte said the Government's latest childcare plan will do little to deliver for middle-income families.
"In an effort to score political points, Minister Zappone rushed the Single Affordable Childcare Scheme, and we are now left with a system that is scrambling to meet even its most basic requirements," Ms Rabbitte said.