How do housing benefit deal with childcare vouchers?

SandA

Hello,

Currently we receive £6 tax credits and some housing benefit, we both work full time.

However, after April we will no longer be entitled to tax credits, but should still be entitled to some housing benefit.

According to a calculator we would be about £966 better of per year if we used childcare vouchers. However, in terms of housing benefit would this effect it? currently I think they discount our income by the amount of childcare we pay. Will this remain the same if we are using childcare vouchers?

I suppose what I am trying to say is will anything be different if we are paying out of our wages for childcare, or if we are paying by way of childcare vouchers. If they were to disregard the childcare we pay (by deducting the amount of childcare voucher value) then we would be better off because of not paying NI and tax.

Thanks

Housing_Benefit_Officer

Only the childcare you physically have to pay out of your own pocket is taken into account - so childcare £100 - childcare voucher £25 - childcare used in calculation of disregard £75.00.

SandA

Sorry I am a bit confused, if say our net pay between both of us is £2500, but we both opt to have £50 per week in childcare vouchers, and so our net pay is deducted to £2100, would housing benefit be calculated using a figure of £2100, or would they still use a figure of £2500 and not disregard the childcare voucher reduction?

Thanks

Housing_Benefit_Officer

They will use the £2100 figure as income.

But if you then use childcare vouchers towards child care for benefit purposes it isn't counted as childcare expenditure as per my earlier post.

SandA

So in easy terms it is going to be better for us to not have childcare vouchers, otherwise we are going to have less salary because of childcare vouchers and HB will not disregard this?

Housing_Benefit_Officer

SandA wrote: »

So in easy terms it is going to be better for us to not have childcare vouchers, otherwise we are going to have less salary because of childcare vouchers and HB will not disregard this?

Correct - there are plenty of articles online about this already.

SandA

Sorry I am still confused and I can't find any articles online.

I have opted for childcare vouchers which deduct my income by 173 per month. So my net pay goes from 1300 to 1027.
additionally I pay the extra childcare out of my wages which is an additional 45 per week.

Therefore will housing benefit treat my wage as 1027 or 1300??

I understand that they will only disregard 45 per week because that's the childcare that I am physically paying out...but will they treat me as having 1300 or 1027 because of the vouchers?

Housing_Benefit_Officer

SandA wrote: »

Sorry I am still confused and I can't find any articles online.

I have opted for childcare vouchers which deduct my income by 173 per month. So my net pay goes from 1300 to 1027.
additionally I pay the extra childcare out of my wages which is an additional 45 per week.

Therefore will housing benefit treat my wage as 1027 or 1300??

I understand that they will only disregard 45 per week because that's the childcare that I am physically paying out...but will they treat me as having 1300 or 1027 because of the vouchers?

£1027 - but as explained in my earlier post whatever is paid for childcare using the vouchers isn't counted as childcare expenses for benefit and tax credit purposes.

http://www.litrg.org.uk/News/2006/childcare-vouchers-warningagain

http://www.rightsnet.org.uk/forums/viewthread/2599/#10663

https://www.gov.uk/childcare-vouchers-better-off-calculator