Tax credits and childcare vouchers

amcraig

OK - I think I know the answer to my question but would just like some confirmation before I tackle my ex.

I'm a working single mum. I claim tax credits and I also get some maintenance from my ex. His work are offering a childcare voucher scheme and he has suggested that he give me vouchers instead of some of the maintenance money.

Now, am I right in thinking that as soon as I start paying for childcare with vouchers then my tax credits will go down because under the rules anything paid with the vouchers isn't counted as a cost? I only ask the question because it won't be me receiving the vouchers from my employer and as such I won't get the tax/NI benefits. It seems like such a lose/lose situation for me that I was wondering if I'd missed something?

THank you.

lauzellen

Don't do it - you will lose money as will not be able to claim for childcare paid with the vouchers and also your income won't be affected so ultimately your tax credit award would reduce. It is your ex who would be the one gaining money as he could give you vouchers to the same amount as he pays maintenance wise now but be paying less for it himself.

AnxiousMum

There's also the issue that if your childcare needs change - there will be the delay between making your changes and your ex's payroll dept. implementing the changes - unfortunately it would be just something that you are liable for, but have no control over. At least with the tax credits and wtc childcare element, you have control - you know when you receive the money, you know the information is current and up to date, and you know when you have to pay it.
One thing I didn't like when I separated was giving up any control over anything that would have an affect on me - he never had the control when we were married, and I wasn't giving him any over me once we separated - so the method your ex is describing would never have worked for me!