The Federation of Early Childhood Providers (FECP) has said that a "significant" number of providers will be closing their doors and going on a three-day strike later this month.
A protest is due to be held outside Leinster House in Dublin between 26 September and 28 September.
The FECP, which represents over a thousand providers in the sector, said creche owners are being forced to close their doors due to high costs.
Core funding introduced in Budget 2022 is said to be a payment to providers of early-learning and school-age childcare to improve affordability for parents. However, the FECP said this has not led to an increase of financial reward for providers.
Speaking to RTÉ's This Week, Chairperson Elaine Dunne said there is also a staffing crisis in the sector and predicts a significant number of creches and Montessori will close in the next 18 months.
"We're looking to sit down around the table with Children's Minister Roderic O'Gorman and discuss exactly what we need for our parents, what we need for the child, what we need for the provider and how much we need to cover the staff wages.
"They never did any due diligence when they decided to put in core funding. They didn't look at the cost of what the service is. That's where the biggest problem is, the Government funding is not covering our costs. It's not helping us with our costs. Many of us are stuck in a fee freeze going back to 2017, not 2021.
"So, when you sign up to core funding, you agree to sign up to a fee freeze dating back to 2021, but for a lot of us it's 2017," Ms Dunne said.
She added that providers cannot keep their doors open.
"You can't keep your doors open without actually having money in the bank. Most accountants would say to you, you must have at least three months' wages in your account at all times.
"We're lucky if we have a month. We want to pay our staff and pay them at much higher wages. But if the funding isn't coming in, how can we do that?," she said.
Louise Priestman, who has two children in a creche, said she supports the protests.
"We have two children in full-time childcare as myself and my husband work full-time. We are heavily reliant on our childcare facility. But this protest will mean that we have no childcare for three days so I will have to take unpaid leave," Ms Priestman said.
Minister for Children Roderic O'Gorman said earlier this week that the upcoming FECP strike is not warranted.
Minister O’Gorman said investment in childcare has risen to "over a billion" since he entered office.
But owner of Cedar Montessori in Leopardstown Sharon McCready said she cannot keep up with the bills in her Montessori.
"We didn't sign up to core funding and that's a business decision and the Government and the department will say 'well, why not'?
"We weren't given adequate time to look at the contract and it was only worth €18 to us. This year they're offering three cent extra per child. For the business going forward it means a lot of things, it could mean, restructuring.
"Wages is our biggest expense. I can't pay any bill straight off. I have to set up direct debits with everybody, so we're liable for rates because we charge parent fees. So, this morning I had to offload €300 to rates.
"The electricity has gone up three times since this time last year. Even just simply on a Friday we give the children a treat, a bag of jellies that cost me 59 cent last year now costs me €1.79. The blue rolls that we use for the hand towels for mopping up and stuff like that used to cost €20 for six. They're now €40 for six, but my funding hasn't increased. It's static. In fact, it's less now than it was in June last year," Ms McCready said.
The latest figures on the department's website show that closures of childcare services have fallen to a five-year low. However, the FECP disputes this, saying creche closure figures are much higher than those provided by the Department of Children.
The federation said many creches that have closed this year have not yet notified Tusla.
Marguerite Keane from Waterford city said there are simply not enough creche places in her area.
She said she was forced to give up her job last year as she could not find a creche for her son Luke.
Luke is currently on a waitlist for 23 creches in Waterford city and county.
Marguerite said there are no creche facilities in her area for the 12-to-18-month year old category.
"It's called a waddler room. The majority of creches were lovely and they all came back to me and told me that there's a lot of people in Waterford with the same situation. Now I approached the Minister and asked him for a response. And his response was to get in contact with the Childcare Committee.
"I spoke to the Childcare Committee on many occasions, and they couldn't help me. Their options for me were that I needed to go down the road of private child minding which I cannot afford. I got a PDF file from the Childcare Committee, and I just went through all of them.
"He's now on a waiting list for all of them. I ring them a lot to find out where he is on the list. There's no way out for me. There's none. I don't think the Government has any respect for women at all. I think they don't want women to go back to work," Ms Keane said.
