This week on the blog, a guest post from my colleague Laura Czapiewski, product manager for childcare vouchers on the planned changes in the childcare funding.
So after much deliberation, discussion and pre-selling, the Coalition finally made an announcement around the future of childcare funding last week.
For parents, the headline news is the introduction of a new Childcare Voucher Scheme from 2015 where working parents who are both in employment can claim up to £1,200 per child towards the cost of childcare. To be eligible, parents must be earning less than £150,000 a year and not be receiving support through tax credits. It will arrive in the Autumn of that year at the earliest.
What does this mean for the existing childcare voucher schemes (or the Employer Supported Childcare Voucher Scheme as it is officially known)?
The Coalition has said it will remain open to new entrants until then it will close when the new scheme comes into force. However it will continue for existing beneficiaries after this date.
The next step will now involve a consultation to discuss these plans with employers, representatives of working parents and childcare voucher providers.
But what should you make of the proposed changes?
On the positive side, we think this is a good deal for those working parents who have up to now not been eligible for any support.
In addition, the extension of financial support for working parents, particularly to the self-employed, is long overdue and something we have campaigned hard for. This is an important part of the UK workforce essential to our economy and fight away from recession, who desperately needed childcare support. It is a shame they will have to wait until 2015.
It is also good news that members of existing childcare voucher schemes won’t be penalised by the new arrangements and those who have joined prior to the implementation of the new scheme will continue to benefit. This is important as in many cases it is likely working parents will be better off with the employer funded Childcare Voucher Scheme.
On the negative side for working parents who join after 2015, the new scheme will initially be more limited in its support. It will only be open to working parents with children up to the age of five, extending to the age of twelve after one year.
The existing employer-funded scheme is open to working parents with children up to the age of 15 (1st September following their 15th birthday or 16th if they are disabled).
For employers this means they think about how they can help all eligible working parents take advantage of the current childcare voucher now so they don’t lose out in 2015.
We will be working with Government to ensure the new scheme gives the best possible outcome for working parents, employers and childcare providers. We strongly believe employers have a key role to play in any future scheme, especially in validating the eligibility of scheme participation and communication so if there is one last reflection, it is that employers engage in informing the new arrangements. It’s something that will benefit their business and their employees.
Laura Czapiewski is product manager for childcare vouchers at Edenred – www.edenred.co.uk
