2018 changes to Childcare vouchers leave 63% of parents unprepared

2018 changes to Childcare vouchers leave 63% of parents unprepared

Confusion over Tax-Free Childcare arrangements set to be rolled out next year

Confusion over Tax-Free Childcare arrangements set to be rolled out next year.

According to a recent survey by The Childcare Providers’ Association, families are confused and unprepared for the changes due to take place from April 2018. It is anticipated that hundreds of families will lose out.

The current Childcare Voucher Scheme is administered by employers for all applicants who earn the minimum wage after the deduction of childcare. In future, parents will be responsible for administering their own Tax-Free Childcare account, and to qualify, both parents must be working for at least 16 hours each week. Under new proposals, this benefit will be available to parents who earn up to £100,000 and extended to the self-employed.

The survey shows that 66% of parents are better off with Childcare Vouchers than they will be with Tax-Free Childcare. Currently, these vouchers are available for children up to the age of 15. Under the new arrangements, the upper age limit will be 12.

Parents who are basic tax payers and currently spend £100.00 on childcare through a regulated provider save £32.00 of that figure. Under the new system, parents continuing to spend £100.00 whilst using Tax Free Childcare will save £20 as basic rate tax payers.

The same research shows that 85% of businesses consider their role in promoting the understanding of childcare vouchers to be important and 93% of employers would like the Childcare Voucher system to be kept open in parallel with Tax-Free Childcare. 

David Drew MP commented “This system is less than straightforward. Parents are advised to prepare carefully for these changes and to use the Government’s ‘Better Off Calculator’. Indications show that some families are set to lose up to £545 each year.”

There is a petition on the Government’s Petition site for those people who wish to support the continuation of the Voucher Scheme.

  David Drew   MP for the Stroud Constituency

David Drew
MP for the Stroud Constituency

 
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