Childcare voucher scheme ‘is unfair to stay-at-home mums’

Plans to give tax-free vouchers worth £1,200 per child to families where both parents work have come under fire for penalising stay-at-home mothers.

George Osborne plays with Titas (centre) and Taylor (left), during a visit to a nursery in Hammersmith, London.

There has also been anger that high earners on salaries of up to £150,000-a-year will be eligible for the scheme and concern that single parents could lose out under the proposals launched by Chancellor George Osborne.

Mr Osborne, who says the plans will mainly benefit those on low and middle incomes, toured a nursery yesterday as he launched a consultation on the plans.

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The proposals, which were heralded in the Budget in March, will offer support from 2015 to families where both parents work, as part of a £1bn-a-year package of help with nursery bills.

George Osborne plays with Titas (centre) and Taylor (left), during a visit to a nursery in Hammersmith, London.

Ministers believe the initiative will eventually help 2.5m households, but it has been criticised as directing 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. By contrast, child benefit cuts have hit families where one parent earns more than £50,000.

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, although critics say this is less generous than what is offered to working families.

Childcare and parenting groups have criticised the plans, calling them unfair to single-parent families and stay-at-home mothers.

But the Chancellor said: “It will help those on tight family budgets who have to weigh up the cost of childcare when they are making difficult lifestyle decisions.”

Mr Osborne claimed the scheme would help the “millions of people who have to work for financial reasons, or choose to work for lifestyle reasons”.

He said the “vast majority – and I use the word vast to include virtually everyone who is going to benefit from this – are people on low and middle working incomes”.

Mr Osborne insisted he had “huge regard” for mothers who stayed at home and said they could benefit from a forthcoming married couples’ tax break.

The voucher 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.

The Resolution Foundation thinktank, which campaigns on behalf of low-income workers, warned that the bulk of the money will not go to the poorest households.

Neil Leitch, the chief executive of the Pre-School Learning Alliance, which represents childcare providers, said the plans did not help stay-at-home mums, who he claimed were given no practical support by the Government.

He said: “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 are disappointed that this £1,200 tax break will be dependent on both parents working and flies in the face of pre-election rhetoric where several MPs spoke of ensuring support for families in this way.”

Katie O’Donovan, of parenting website, Mumsnet, said: “Mumsnet users have been calling for help with the ever-rising cost of childcare, which is a serious impediment to many mothers returning to work after children, for some time, so we welcome the additional funding going into this scheme.

“However there is concern that single-parent households might lose out whilst some very high earning two-parent households will benefit.”