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
    0

    Comment number 511.

    A party in panic - they cut the poorest of peoples money in the way of benefits or child tax credits and then try to sweeten there diabolical acts by offering this, which they say will happen in 2 years - they will not be in power in 2 years lol.
    This coalition are pathetic - the average wage is about £16,000 - 24,000 if the average wage was even near £150,000 no one would need it anyway.

  • rate this
    0

    Comment number 510.

    So being a sahm isn't a full time job?

    Also, you try finding a job when you have small children at home. HAH. Nobody will employ you even with childcare. Unless you had a job prior to having kids, forget employment now. Least that's been my experience.

    SAHMs need a break too, it's a 7 days, 365 job, just a few hours a week for sanity. One income can seldom extend to such luxuries.

  • rate this
    0

    Comment number 509.

    Don't see this policy playing for 1. Its a massive slap in the face for stay at home parent. 2. For the singleton on a average salary paying for rich double income professional lasses childcare stinks. 3. It smacks of the metro professional classes helping themselves a state hand out. Pretty bad politics all round. In short probably lose more votes than it wins

  • rate this
    +1

    Comment number 508.

    Substantial financial help for parents who are willing to leave the upbringing of their children to others. Nothing for those who wish to nurture their children themselves except for a crazy child benefit policy which rewards two income families whilst militating against one income families thus encouraging a regime of low wages, low taxes and poor social provision. A totally hopeless Government.

  • rate this
    +1

    Comment number 507.

    All other options get some form of support, but not the wrong one... the one that one parent stays at home and take care of the children... really? This is sending a really bad message to families. It is very disappointing to be treated like that.

  • rate this
    +8

    Comment number 506.

    It would be a darned site better if the scheme was not applied to couple earning £300,000pa,thus allowing FAR more money to be released into it for those hard-working "average"earners who could really benefit.Once again,Osborne has looked after rich Yuppie friends who earn £300,000 per couple and who are going to get financial help when poorer people are being squeezed to breaking.Roll on 2015 !

  • rate this
    +1

    Comment number 505.

    I don't see why the limit is £150,000 - that is colossal! If you earn that much, do you really need money to help to look after your children? Surely not!
    However, those parents who choose to raise their children themselves rather than dump them with the child minder, get no thanks! Children who are raised by a nanny or child minder are 9 times out of 10 more disruptive and harder to control.

  • rate this
    0

    Comment number 504.

    Just up income tax threshold.
    Then everyone benefits fairly.
    If you want to spend it on child care, fine, but I dont see why I should subsidise elective life choices of people on 10-15 times my salary.
    Only the TORY party would think people on 150k a year need support....totally clueless and out of touch.

  • rate this
    0

    Comment number 503.

    I am sure some people will benefit with the new scheme, however as with all changes being made, my husband and I will be worse off. I am about to go back to work 3 days a week ( to pay for food and petrol for our family). We can both get childcare vouchers so can save £933 each per year. We will be £666 worse off in 2015. I might have to work more to pay the difference...

  • rate this
    0

    Comment number 502.

    Why should you get any money to have kids. If you can't afford them don't have them.Sick of these single mums getting all these hand outs. They don't stop at one kid.

  • rate this
    0

    Comment number 501.

    My wife is a full time carer of my two children. What is legally stopping my wife from becoming a self employed carer of our children, and as a sole earner I pay her to care for them? Surely we will both be classed as working in this case and eligible for the new scheme?

  • rate this
    0

    Comment number 500.

    me and my partner had it all planned out while she was pregnant and then i became ill and am to ill to be able to look after my own daughter on my own my partner does not want her to grow up with out things we did not have when we grew up and wants to go back to work but cant as its just not a viable options but this could have got her back to work paying tax but she cant use it its stupid

  • rate this
    0

    Comment number 499.

    Non-working partner need not suffer financial loss. A company needs to be set up to offer them a ZERO working hours contract, say for a small fee of £5 on-line and they are therefore seen as working and will get the Payment, but working ZERO Hours. Two political issues which will marry together.

  • rate this
    +1

    Comment number 498.

    I fail to understand how people earning £120,000 need their child care subsiding - it's 4 times my salary! I'm being taxed into the ground to subsidise people who are richer than me. I see elsewhere that Sandy Woodward died today: Like me, I doubt he'd understand how we can afford to subsidise the lifestyle choices of the chattering classes yet can't afford a navy.

  • rate this
    +2

    Comment number 497.

    Both my husband and I have to work to make ends meet. We can not afford for me to stay at home and look after the children ... This is not selfishness it is reality. Any support with child care will help ... It is just a shame that by the time this comes in they will both be at school! It's funny that rising costs happen quickly but support takes such a long time.

  • rate this
    +1

    Comment number 496.

    Globemaster - I don't think sahm's are wanting special recognition, but in our society today, we seem to be looked down upon. I have worked for 17 years and have taken 2.5 yrs out to look after my child. I depend only on my Husband and yet, I am faced with the view that being a sahm is a way of being lazy and avoiding work. It would be nice to be seen as an acceptable choice.

  • rate this
    0

    Comment number 495.

    Yeah Perhaps, the government is right... with that perspective of being a full time mum, my "lifestyle choice" is wrong. Will send the kids to childcare a work full time ONLY to pay for it. Ah, but I get the status of full time worker,,, which is a better lifestyle choice after all. Got it. ;)

  • rate this
    -1

    Comment number 494.

    Quite happy that the scheme is not going ahead just yet. A true catch 22 and, as ever with this government, not truly meant to help you. To me it reads like a scheme of big savings for the government rather than genuine help for families. You will not qualify unless you work.
    Currently on maternity leave from my doctorate, I will be able to resume my studies because my husband can claim vouchers.

  • rate this
    +1

    Comment number 493.

    That is it. It is a priceless job. Therefore, I have to work without pension plan in hopes that my husband doesn't divorce me and my children don't forget about me when I grow older. Nice eh?

  • rate this
    0

    Comment number 492.

    Me being at home with my daughet is not a "choice" ...... I would happily go to work and bring home two wages, but i live in Germany with my husband who is a serving British Soldier. You try to find a job out there, and then childcare for your child which doesnt cost over a grand month. Will be even harder when we return here having been out of work for two yrs. Thanks to a great government.AGAIN.

 

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