Childcare voucher schemes set to change

Childcare voucher schemes are expected to change in Autumn 2015, under plans to be unveiled by prime minister David Cameron and deputy prime minister Nick Clegg today.

The new system, which will replace the current salary sacrifice arrangements for childcare voucher scheme, will see employees pay 80% of their childcare costs to a voucher provider while the government will subsidise the remaining 20%, up to £6,000 per child per year.

This removes employers’ responsibility to support parents with childcare costs. Under the scheme, working parents will be able to choose their own voucher provider because it will not be a salary sacrifice scheme operated through their employer. This also removes the administrative work placed on employers under the current scheme because they will no longer need to make deductions from employees’ salaries.

The new scheme will also be available to those on minimum wage and those who are self-employed, both of whom are unable to take advantage of salary sacrifice arrangements around the current childcare voucher scheme.

John Woodward, managing director at Busy Bees, said: “We are pleased that the government is continuing to support working parents and recognise that the cost of childcare is a huge burden to parents.

“The new system will not only save recipients more money compared to childcare vouchers, but it is also estimated that it will benefit around twice as many working parents.”

Sarah Jackson, chief executive at Working Families, added: “It is good news that the government has recognised the need to address the high cost of childcare and we’re particularly pleased to see new money has been found to support parents in work.

“However, we are concerned that three groups of parents, all of whom need support, do not miss out.

“Employer-supported vouchers filled a gap in childcare support by helping families when one parent was studying or retraining. They also provided vital support if one parent was made redundant. They enabled a family to keep a childcare place open while the out-of-work parent looked for work.  

“We are concerned that help with the new childcare vouchers will be limited to families with all parents in work. It is important that families in these situations don’t lose out, and that support is available to those trying to get back into work.”