Under a new scheme, that is part of the budget, some working parents will be eligible for a tax-free childcare support worth £1,200 a year for each child. Parents will be eligible to receive 20% of their yearly childcare costs up to £6,000 a year from 2015. Both parents will have to be in work with neither partner earning more than £150,000 a year to qualify.
How it will work
- Parents will be able to open an online voucher account with a voucher provider and have their payments topped up by government.
- For every 80p families pay in, the government will put in 20p up to the annual limit on costs for each child of £1,200.
- Parents will be able to use the vouchers for any Ofsted regulated childcare in England and the equivalent bodies in Scotland, Wales and Northern Ireland.
- The scheme will initially only be open to pay for children under five but will eventually include all children aged under 12 years
- The scheme is expected to benefit 2.5 million families.
- Parents using the existing childcare voucher system will be able to continue using that scheme instead
- Full details of the new scheme will be proposed in a consultation before being finalised.
David Cameron said this new measure was “a boost direct to the pockets of hardworking families in…one of the biggest measures ever introduced to help parents with childcare costs.”
However some critics were concerned that the extra support would go to parents in the top half of the qualifying income range.