Chancellor's new childcare discount proposal

becominganobsessivesaver

The BBC have published details of the new childcare proposal http://www.bbc.co.uk/news/uk-politics-21833929

Personally I think it is horrendous that they are trying to say this a positive change, they are basically proposing to get rid of the current voucher scheme (which means those who are currently still getting the higher rate breaks, who have just lost child benefit will lose out again.) When one parent isn't working there will be no refund, so this means non-working parents may miss out on a brief respite (i have friends who use a nursery a day a week for their sanity).

I also think it may encourage providers to up their prices.

It also doesn't say whether it's 20% of £6,000 per parent, per child or per family. If it's per family the only people who will be better off are those whose employers don't offer the voucher scheme (oh and the government!)
What does anyone else think?

clairehi

I agree with everything you say, if the 20% discount is per family then many families where both parents receive vouchers currently will be worse off. And yes it will be even worse for higher rate tax payers.

The BBC don't seem to realise that this policy far from being a help to working families is actually another cut in support for them. Any chance of Martin taking this up?

Jevvers

Martin has tweeted that he will be on Newsnight at 11pm.

mountainofdebt

Perhaps its because of the way that the voucher scheme has been used (or should that be abused?) when a mother goes on maternity leave and has these vouchers?

sweaty_betty

mountainofdebt wrote: »

Perhaps its because of the way that the voucher scheme has been used (or should that be abused?) when a mother goes on maternity leave and has these vouchers?

I'm not sure why it's abuse of the system to collect childcare vouchers while on maternity leave? Many people I know will still put older children in nursery (or use them to pay for after-school clubs etc) while on maternity leave so that they can spend time with the new baby. I remember what it was like having a new baby and the thought of having to deal with both the baby and entertain a toddler all day every day with no respite is terrifying!

mwa

I agree, why is collecting these vouchers whilst on maternity leave 'an abuse'?! This was the only way I could go back to work after my second and I fully intend to do the same on my forthcoming period of maternity leave!

sweaty_betty

Another thing that has just struck me about the new proposals. They talk about "claiming back" £1200 - so working parents who use childcare will have to pay the full amount up front, then claim it back at the end of the tax year? That might work for people who are used to filling out tax returns etc but it's a hassle for the majority (?) who don't.

Personally I'd benefit from the money on a regular basis rather than a lump sum that I have to make a concerted effort to claim back.

mountainofdebt

When I said abuse perhaps what I should have said he's closed the loophole by where the mum on maternity leave can have her cake and eat it as the value of the vouchers can't be deducted from her smp....so in effect the employer is paying for the childcare.

MrChips

That's not abuse, that's how the system is meant to operate. it's no different to pension contributions paid via salary sacrifice.

I think there must be some misunderstanding as to how the new system will work as the one that has been announced is clearly daft. At the moment my wife and I both get the vouchers with tax benefits of about £2,400 per year. To replace this (not to mention child benefit) with £1,200 can't be sold as an improvement, or more likely to help my wife back to work. Confused...

onlyroz

Well I'll reserve judgement for now, but the current voucher system seems to work OK and already has the infrastructure in place. Surely it will be costly to scrap all that and replace it with an entirely new system?

MrChips

Daily telegraph website suggests people will be able to keep childcare vouchers if they want. Phew!