Osborne unveils £1,200 vouchers to aid childcare

Chancellor George Osborne
Chancellor George Osborne
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PARENTS who do not work because they are carers will be eligible to claim childcare support worth up to £1,200 a year for each son or daughter under a new Government scheme.

And the initiative – announced in Chancellor George Osborne’s Budget in March – will be extended to those who are off work during maternity or paternity leave.

Mr Osborne has launched a consultation on the tax-free childcare voucher plans, which will offer support from 2015 to families where both parents work, as part of a £1bn-a-year package of help with nursery bills.

Ministers believe the scheme will eventually help 2.5 million households, but it has alredy come under fire from critics who say it will direct more help to well-off families than the poor. The vouchers will be available to parents earning up to £150,000, so a couple with a combined income of £300,000 could claim them.

Parents who claim universal credit will benefit from a separate scheme under which the state will cover up to 85 per cent of their childcare costs – rather than 70 per cent as at present – though critics claim this is less generous than the help on offer to working families.

And there have been protests over the exclusion of households where one parent stays at home to look after children.

Mr 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 new scheme will cover 20 per cent of working families’ childcare costs up to a limit of £6,000 per year per child, meaning that up to £1,200 could be claimed for each child. The average cost of a part-time nursery place for a child under two in the UK is now over £5,000 per year

New details made clear that people on parental leave after the birth of a baby will qualify for any children they already have and parents who do not work because they are carers will also be eligible.

The consultation proposes the scheme should run in conjunction with the school year, so that parents of eligible children can receive support with childcare costs for the full school year and all children in the same class are treated consistently.

Chief Secretary to the Treasury Danny Alexander added: “The Government wants to build a stronger economy and a fairer society and key to that is getting more people into work. We won’t let childcare costs stand in the way of parents’ ability to work if they want to.

“Tax-free Childcare will put money in families’ pockets, saving the typical two-child family up to £2,400 per year on their childcare costs and allowing parents more choice to work the hours they want.”

Neil Leitch, chief executive of the Pre-School Learning Alliance said the voucher scheme was unfair to stay-at-home mums.

“In the recent More Affordable Childcare document the Government gives a ringing endorsement of those parents who choose to stay at home and look after their children, saying they have ‘the Government’s full support’,” said Mr Leitch. “However, when it comes to practical support that’s where it stops, with the Government giving priority to a ‘get back to work’ policy.

“This tax break does nothing to support those who choose to sacrifice their salary and put their careers on hold to stay at home and look after their young children.

“We would prefer the Government to properly fund universal childcare provision for all families, regardless of income. Instead, this seems to be more about dangling a £1,200 carrot to tempt mums back to work rather than providing real childcare choices.”

The plans come as a new report reveals more than two million working mothers are their family’s main bread-winner. The figure means one in three working mothers are the main source of their family’s income, said the Institute for Public Policy Research.