The UK is bucking the trend from most of Europe and experiencing a baby boom, and with all these new arrivals the Government has announced changes to the existing scheme, aiming to provide wider access to childcare savings for working parents.
The scheme launch is Autumn 2017. The scheme will allow parents to buy vouchers online to pay for childcare, the Government will add 20p for every 80p that the parent contributes, up to a limit of £10,000. If a parent claims £10,000, he or she will pay £8,000 and receive a £2,000 Government subsidy.
Tax Free Childcare Vouchers will be available to pay for childcare for children up to 12 years old, however the age restriction will be phased in over the first year: at launch only under-5s will qualify but by the end of the year it will apply to all under-12s.
The scheme will work in quarterly entitlement periods – once eligible, parents will continue to be entitled to support for three months, regardless of any change in circumstances.
Unlike the current employer scheme, both parents in the household must be working at least sixteen hours per week (this is also the case for single parent families) and each earning just over an average of £100 per week to be considered as eligible. Additionally the new Government scheme is open to self-employed parents unlike the employer scheme currently in place.
Those whose income exceeds £100,000 per annum or parents who receive support through tax credits or universal credit will not qualify for the scheme.
Will the new scheme affect my existing Vouchers for my little “Johnny and Melissa”
All working parents in receipt of Childcare Vouchers from their employers’ scheme before the introduction of the new scheme will continue to receive these vouchers with the same financial benefits. After Autumn 2017 the scheme will be frozen to new entrants.
‘Should I stay or should I go’ for new scheme?
Depending on your circumstances you could be better off in the existing employer supported scheme. For instance if you:
- are claiming vouchers for children between the ages of 13 – 15
- are earning in excess of £100,000 per annum
- have only one parent in the family working
- work less than 16 hours per week or
- require regular assistance updating your account, making payments to your childcare provider or adding new childcare providers to your account (the government scheme does not offer any helpline or contact email address for queries on the scheme)
You may want to consider enrolling or remaining in the current scheme.
To find out more please visit http://www.nwbrown.co.uk/childcare-vouchers/ or contact Ayesha Ping on 01223 720 221 or email Ayesha.Ping@nwbrown.co.uk
This service is provided by NW Brown & Company Limited, a subsidiary of NW Brown Group Limited, authorised and regulated by the Financial Conduct Authority to provide regulated services (191123).
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