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
    +1

    Comment number 411.

    270.George
    After school clubs are not free you know. Parents with school age children also have childcare costs.

    What is free nowadays? Why shouldn't parents pay for after school clubs for their children? Should they expect childless people to pay for cinema trips etc for children? I suppose some would.

  • rate this
    +1

    Comment number 410.

    If government pay people to look after their kids, then why don't we all stay at home & make single people work instead? You work, you pay, you raise your kids; if paying for kids were our duty, what rights do I have as a tax payer to stop kids behaving badly?
    We are paying for these people's votes and nothing else, great.

  • rate this
    +2

    Comment number 409.

    403. - Why do we the tax payers have to support child care arrangements?

    Because when people work they pay taxes, when they are not, they claim benefits, therefore it is better for all if they are in work, but childcare costs have risen exponentially since state nurseries were shut down and childcare privatised leading to the situation where people can earn less than their childcare costs.

  • rate this
    +2

    Comment number 408.

    Love the divide of "working parents" and "stay at home parents" as if staying at home and bringing up your children isn't work! We have a two year old, juggled our jobs, so one of us has been at home and this we will continue until they are at school - it's called planning and making sacrifices. If this proposal goes ahead it will confirm that our politicians value the economy more than family.

  • rate this
    +3

    Comment number 407.

    Why is it the UK is so bent on a "Tax Credit" system where people even in the "Middle Classes" are now reduced to calling in benefits and of the Tax Credit Regime?

    What a totally nanny state UK has become.
    It seems to me that government considers ALL money is governments until it is claimed back in Tax rebates and credits.

    Good governance is ARMS LENGTH otherwise it becomes a dictatorship.

  • rate this
    +3

    Comment number 406.

    In the1960s/70s,couples who got married got a full years TAX back from the revenue.They also got a Marriage allowance and child tax allowance when their first child was born.
    In 1967/8, it changed.
    Tax rebates were scrapped as was marriage allowance. Only child allowance remained.Yet even the child allowance was for ONE CHILD.
    TOO much govt changes resulted in mess today.
    CITIZENS not to blame

  • rate this
    +1

    Comment number 405.

    It's outrageous to see people complain about childcare as if it was some kinda shock. Do they not check when they plan for kids? or is everything an accident these days?
    Can't afford kids, don't have them. Tax payers' money should stay clear of personal lives/non-emergency situations. Child poverty, more like parents' ignorance.

  • rate this
    +3

    Comment number 404.

    What this country needs most is fewer people.

  • rate this
    +7

    Comment number 403.

    Why do we the tax payers have to support child care arrangements?

    My wife and I brought our two children up with just the 'normal' support of free education and health provision.

    Everyone expects the government (tax payer) to pick up the child care tab. This huge cost and the increase in births is being accelerated by immigrants who can't believe that we subsidise their large families

  • rate this
    +2

    Comment number 402.

    The government says it wants to expand a new childcare tax credit scheme
    =================
    So with all the "Austerity Measures" that have been inflicted upon us, how is it that government now find loads of money to throw around?
    Giving back the poor and disabled peoples "bedroom tax" to the rich?

    Something smells fishy swims like fishy tastes like fishy....

  • rate this
    +2

    Comment number 401.

    Just HOW in history has govt intervention in the choices of citizens ever ended happily???
    People should begin to take action to prevent their lives being controlled too minutely by the well paid. well fed and immune to accountability crats who run GB on behalf of our elected representatives who think up the rubbish that is passed as "caring" legislation!?
    ALL Parties are to blame!So are unions

  • rate this
    +4

    Comment number 400.

    Although I'm not against going to uni but if you have a child that should be your first priority and uni is a choice. I work full time about 40 hrs a week and do about 30 hrs a week uni studying yet I don't get help and I don't expect to. I chose to do that. I'm doing this now to have better future for any children I later decide to have. You have to work around children.

  • 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 398.

    The beeb punters version of the consultation ain't going too well is it?

  • rate this
    +3

    Comment number 397.

    I am a carer who looks after someone with severe mental health problems. Nine months ago I had to reduce my hours to 25 per week as the caring role became too much when working full time. I am now on a low wage but do not receive any help from anyone. I can't understand why people on such a high income are receiving help with childcare. I earn just over 1,000pcm.

  • rate this
    +3

    Comment number 396.

    The solution according to consecutive governments over the last 40 yrs:

    1. Let's screw up the wages for everyone so that mothers are forced to go out and work full time.
    2. Charge ever higher levels of taxation and then use some of that money to pay someone to look after the kids for the same mothers that are forced to go to work.

    For circular logic, see UK's "representative" democracy

  • rate this
    -4

    Comment number 395.

    Some people are stay-at-home parents because they can't get a job/are/job-hunting/attending uni. Some are stay-at-home parents because the child needs special attention. Some stay at home because they want to. Some stay at home because they can. The first two categories should be able to get child-care, the second two shouldn't.

  • 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
    0

    Comment number 393.

    George Osborne has pitched this proposal in such a way that he himself, and his wife, will be able to receive it. That should help pay for Luke and Liberty's prep schools. Coincidence?

  • rate this
    0

    Comment number 392.

    383.ceriann123
    There used to be an adage that you only had children if you could afford them and not as cash cows. I agree with you on the income limit - this too should be set at the Benefit level of £26k per household - which in itself is far too much.

 

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