Childcare voucher scheme: Plan 'will include parents who are carers'

 

George Osborne: "Tax-free childcare will be a real help to working families"

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The government says it wants to expand a planned childcare tax credit scheme to include parents who stay at home because they are full-time carers.

A 12-week consultation on the scheme, worth up to £1,200 a child, has begun.

Families with two working parents could be able to claim, and ministers said carers who look after disabled relatives and others would be included.

Chancellor George Osborne said stay-at-home mothers, who had made a "lifestyle choice", would not be eligible.

The government says the overall scheme - set to replace the existing system of employer-supported childcare vouchers - will help 2.5 million families.

'Level playing field'

It is aimed at getting more people back into jobs.

The UK has some of the highest childcare costs in the world, with many people with two or more children saying it does not make financial sense for both parents to work.

Financial Advisor Yvonne Goodwin and Imogen Thompson, from the Mothers at Home Matter group, debate the scheme

The new system is expected be phased in from autumn 2015, with children under five helped in the first year. It will then build up over time to include all children under the age of 12.

Families with two working parents on less than £150,000 each would be able to claim up to £1,200 a year per child.

Critics have said the focus on work will penalise parents who stay at home to look after their children, or are unable to work because they act as full-time "carers" for other adults.

However, extra details released by the government on Monday make it clear that parents who do not work because they are carers will also be eligible.

Carers are defined as those spending at least 35 hours a week looking after someone such as a disabled relative.

But the scheme will not be extended to those who stay at home to bring up their children.

Lisa Frederiksen with her son, Casper

Lisa Frederiksen, from Epsom, Surrey, was "staggered" by childcare costs for her children Casper, four, and Elizabeth, two.

She said: "As a career-orientated woman, when I had my first child at the age of 40 I was staggered at the cost of childcare.

"My employer would not agree to a part-time role, so I was faced with childcare costs of £1,200 per month.

"After my second child, it became apparent that working was not going to pay. With two lots of childcare and the costs of commuting, it just wasn't worth working.

"My Danish husband's family cannot comprehend the cost of childcare here. They pay £300 a month for care in well-equipped, carefully staffed nurseries.

"This new scheme is a drop in the ocean, but we need a radical rethink."

Mr Osborne told BBC Radio 4's World at One programme: "This is help for formal childcare. Obviously it's not for stay-at-home mothers.

"I have huge regard for mothers who want to stay at home and look after their children. That's their lifestyle choice. I want to help those families too. I'm not trying to be exclusive.

"We have a proposal on married couples' tax breaks which I'm going to introduce in the Autumn Statement later this year... that will help stay-at-home mothers."

Lynne Burnham, secretary of Mothers at Home Matter, called for a "level playing field" for all families, with the introduction of a "family allowance" for all households with children under the age of 16.

She added: "It should not be for this government to dictate how a family chooses to care for its children."

Under the proposal, parents will be required to open an online voucher account with a voucher provider and have their payments topped up by the government.

For every 80p families pay in, the government will put in 20p, up to the annual limit of £1,200.

The vouchers will be valid for any Ofsted-regulated childcare in England and equivalent bodies in Scotland, Wales and Northern Ireland.

Half of the funding for the new scheme will come from the abolition of the previous system of employer-supported childcare vouchers - which is provided by only about 5% of employers - and in part by funding switched from elsewhere in Whitehall.

A separate scheme will provide funding for parents who claim universal credit. It will see the state cover up to 85% of their childcare costs, up from 70% at present.

For Labour, shadow children's minister Sharon Hodgson said: "Only David Cameron's government could be so out of touch that they expect families to be grateful for help with childcare in 2015 when they've already seen costs spiralling and support taken away."

Tax-free childcare: Examples for two-child families

Earners Annual claim back limit Details

Source: HM Treasury KEY: Orange figures represent individuals not eligible for tax credits/universal tax credit. Green figures represent individuals eligible for tax credits/universal tax credit.

figures

carerOne income of £120,000, one of £80,000

£1,200 per child

Two parents working full-time with annual salaries up to £150,000 each will be entitled to claim back 20% of childcare costs, with a maximum of £1,200 per child aged under 5, eventually rising to under-12s.

figures

Single parent earning £60,000

£1,200 per child

A single parent working full-time, who does not qualify for tax credits or universal credit, earning up to £150,000 will be entitled to claim back 20% of childcare costs, with a maximum of £1,200 per child.

figures

One income of £60,000

£0

If one parent works and the other does not, and the family does not qualify for tax credits or universal credit, they will not be able to claim.

figures

Two incomes of £12,000 each

85% of childcare costs

Two low-income workers who qualify for tax credits or universal credit and earn over the income tax threshold (set to be £10,000) will be able to claim 85% of childcare costs. The same applies to single parents.

figures

One income of £12,000, one of £8,000

70% of childcare costs

Families where both parents work, who qualify for tax credits and universal credit and one parent earns above the income tax threshold (set to be £10,000) and the other does not, will be able to claim 70% of childcare costs.

 

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  • rate this
    +11

    Comment number 399.

    oh for goodness sake, if you choose to have kids then look after them yourself! my husband and i both work with a 9 month old baby and we changed work to plan for this and share childcare between us. To those 'career women' i'm sorry to break it to you but having a child means there's no room for selfishness. You chose that child so you should love and look after it and not expect state handouts

  • rate this
    +3

    Comment number 394.

    I disagree with this. If I could afford to stay at home with my child I would and not wouldn't expect the governement to give me a hand out for childcare. As it stands I can't and need to work. Obviously parents with disabled children need respite, I know this only too well. But if you can afford to be a stay at home mum, why have someone else raising your children?

  • rate this
    +2

    Comment number 373.

    I am a stay at home mum but have just also completed 2 years of study to get my PG at University, I wasn't working but needed the childcare, luckily my husband could use the voucher scheme along with free sessions at nursery and therefore the cost was manageable, we wouldn't qualify under the new scheme which would have meant that I couldn't have gone to Uni

  • rate this
    +38

    Comment number 65.

    I don't know why they just don't means test. If parents genuinely need financial support to work, then fine, support them. If parents are financially secure enough then don't.

  • rate this
    +64

    Comment number 49.

    So a family with two workers and one child, earning £200k between them can claim £1200 in vouchers, whereas a household with one person on £60k, a stay at home mum not claiming benefits and several children have already lost their child benefit and aren't eligible to claim this either. This government don't have a clue about being in it together!

 

Comments 5 of 6

 

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