Childcare Boost For Working Parents

In a pre-Budget announcement the Government has announced a new tax break scheme, due to come into force from Autumn 2015, for the working parents of children up to the age of 12 who need to pay for child care.

The tax break, which Chancellor George Osborne said would be worth £1,200 when it was first announced in his last Budget, will now be £2,000 per child and will be extended to include parents where the joint income is more than £150,000.

According to the Government, around 1.9 million families could now benefit, twice as many as under the present voucher scheme, which is only available where adopted by an employer and currently only around 5 per cent of UK employers are signed up to it.

However, the policy has faced criticism for excluding couples where one parent does not work and also for being available to high-earning households with a joint income of up to £300,000.

Meanwhile, in a bid to counter criticism of help for better-off families, there will also be a £50 million boost for nurseries looking after the most deprived three and four year olds.

In addition, it has been confirmed that families claiming Universal Credit will have 85 per cent of childcare costs met, up from 70 per cent but the detail of how that would be funded will be set out at the time of the Chancellor’s Autumn Statement, a Government spokesman said.

With one charity estimating that the average family will be spending two fifths of their income on childcare within a decade, childcare has become a political battleground.

The Prime Minister has said that “squeezed” families will benefit from the proposals, while Deputy Prime Minister Nick Clegg has called the online childcare tax relief “really simple to use”. However, the Labour party has called the announcement “too little, too late”.