The tax free childcare initiative – now out for consultation – will be worth up to £1,200 a year per child – meaning an average family with two children under 12 will save £2,400 a year.
The scheme will be implemented from autumn 2015, and will ensure that every child born in or after September 2010 will be eligible. Parents must also be full-time employed, with each earning less than £150,000 a year and would not be already receiving support through tax credits, Universal Credits or the current Employer Supported Childcare Scheme.
Commenting on the launch of the scheme, Chancellor George Osborne said: “This government is on the side of people who want to work hard and get on in life. Tax-free Childcare will help working parents by giving them more choice and better access to the quality, affordable childcare they need.”
“We want to make the new scheme work in the way that is best for parents, so today we are asking for their views, and I’d like as many parents as possible to tell us what they think.”
The Charity 4Children welcomed the new announcement, but chief executive Anne Longfield urged the government to make the implementation of any system easy to understand for parents. She said: “Any help for parents in meeting this escalating cost is good news so 4Children welcomes today’s announcement. However, to help parents the scheme must be simple, widely available and apply to childcare for school aged children. Most importantly, with costs rising by more than 5% a year, families need this help now. These will be the measures that parents judge today’s announcement from Government of tax free childcare by.
“Childcare funding is already highly complex and with today’s proposals there will be significant variations in the level of support available to families, depending on their circumstances. For those who regularly move between periods of employment and unemployment, the situation may be particularly complex. The Government needs to ensure that the system that is ultimately put in place is clear and straightforward so that families can easily understand the amounts they will receive and can plan their family budgets accordingly.”
The consultation is currently running through an online questionnaire at https://www.surveymonkey.com/s/tax-free-childcare-consultation