Budget: Childcare Boost For Working Families
Working families will receive up to £1,200 per child a year under major plans to slash the cost of childcare.
More than two million families stand to benefit from the tax-free childcare plans, which have been announced ahead of Wednesday's Budget.
Eligible families will be given up to £1,200-a-year for each child, up to a maximum of 20% of their total childcare costs.
To qualify, both parents - or one parent if they are raising children alone - will have to be in work and each must earn less than £150,000.
But the scheme, which will replace the existing employer supported childcare programme (ESC) will not come into effect until late 2015, after the next general election.
Initially the measures will cover children up to five years old, but the level of support will build up "over time" to include children under 12.
Ministers say to start with, 1.3 million families will benefit, compared to 450,000 under ESC, eventually rising to around 2.5 million.
The Government is set to invest £1.4bn in the plans - half-funded by abolishing the current childcare vouchers scheme and with the rest of the cash diverted from other departments.
Under the current scheme, parents get vouchers worth up to £55-a-week, deducted from their salary before tax is paid.
Prime Minister David Cameron and Deputy Prime Minister Nick Clegg pledged in their January mid-term review that they would act to help working families with childcare costs.
The move appears designed to appease many parents furious at losing their child benefit after cuts to what was once a universal handout.
Mr Cameron said: "Too many families find paying for childcare tough and are often stopped from working the hours they'd like.
"This is a boost direct to the pockets of hard-working families in what will be one of the biggest measures ever introduced to help parents with childcare costs."
Deputy Prime Minister, Nick Clegg added: "The rising cost of childcare is one of the biggest challenges parents face and it means many mums and dads simply can't afford to work.
"This not only hurts them financially, but is bad for the economy too."
Sally Russell, co-founder parenting site Netmums.com, said: "If implemented carefully, it should help a greater number of families with the crippling costs of childcare and keep parents in work."
But William Higham from Save The Children criticised the scheme for failing to prioritise low earners and for the delay in its introduction.
"A policy that doesn't benefit struggling families until 2016 will mean another three years of juggling costs amidst a deep recession. Some parents will be unable to work until that comes into force," he said.
Ministers have already announced plans to let childminders look after more children, which they hope will reduce costs and make more nursery places available.
Britain has some of the most expensive childcare costs in the world - with fees rising at more than twice the rate of inflation, according to the Daycare Trust.
A report by the Trust recently found that a place at the UK's most expensive nursery cost £42,000 - some 25% more than a place at a top public school such as Charterhouse, which charges £30,574 a year.
Shadow education secretary Stephen Twigg said: "Families need real help with the cost of childcare now, not promises of help in two and a half year's time."
what do you think?
Each have to be earning less than 150k per annum? If I was earning that, I wouldn't need childcare assistance!
Agreed, it shows how out of touch they are if they think that 150K pa per partner is a pittance.
that is a very high limit.
They would still moan that they need this child benefit so they can still live the life of luxury.
You would, because you have to keep the Bentley on the road
They're just giving the wealthy another leg up.
What help us there for familys who have a baby when the mum wants to stay at home, the dad is on low income, and can not find a full time job, works part time because he does not want to nothing. I can tell you, Nothing, better off not working, how does that work.
not many mums can stay at home these days unless they on benefits.
Don't have children if you cannot afford them?
Again the taxpayer being forced to pay for somebody else's children. So much money is being thrown at people with children that it is beginning to look like positive discrimination.
Wouldnt it make more sense to provide this money to the parents so they can opt to reduce their hours to spend more quality time with their children in these formative years - allow one parent to maybe go part time - rather than an expensive surrogate? It would reduce costs and additional red tape while providing what is the best care for the child.
Wouldn't it make more sense to spend your own money on this and not expect others to pay for you??? If those who don't have children want to take time away from work for personal reasons they don't get finance from the tax payer so why should you?
the thing to note here is paid out of wages before tax. now they are scrapping it and its after tax so you will be no more better off. just clever wording. stinks!
Most people have kids for houses and benefits and see kids as a fasion item these days
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the beckhams spring to mind!! heard a couple of americans discussing the childrens name said it was fortunate the did not concieve on the kitchen table or bathroom floor Just think of the childrens names
Sooooo pleased to hear that my hard earned middle income wage goes to support eastern European children not even in the country!! The missus had to give up her job to look after 2 kids (remember previous government said 'having a parent at home was much better environment for kids to be brought up in). NOW if only we were both earning £299,000 p.a we would be able to get help to the tune of £3000 p.a!!!!! WELL DONE BOYS.....KEEP UP THE HARD WORK........................Cos i have too!!!!
Outrageous. The Government should start to discourage families from having more than two children in any case. We do not need more mouths to feed when our economy is in dire straits.
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Where do these people get their figures from? How can a nursery charge £800 per week, or £160 per day to look after a child? 3rd question: How do I become a child minder? I'll do it for 50% less.
I get £3 an hour as a childminder. Allowed to look after 3 kids. Nurseries charge more and allowed more children per carer. I dont get a lunch break either.
Why do you think there are so many private nurseries,its relatively easy money alot paid by government and subsidies,as they see it legitimate target to rip off, the job is quite low paid so owner/stakeholders rake it in. Of course all the rules and regs don't make setting up simple but once there your on easy street.
In reality this is just another "come vote for me next time" hot air promise
They have learnt well from labour Remember the one of assistant with council tax Labour handed out just before an election after their policies banged it up 20% Total misuse of tax payers money
Yes Michael they're all guilty of such tactics,most of us know it yet we still vote for the bu**ers.
The Government is set to invest £1.4bn in the plans - half-funded by abolishing the current childcare vouchers scheme and with the rest of the cash diverted from other departments. I wonder which benefit will be cut again to divert this cash.
The cost of childcare is too expensive and is becoming unaffordable. The Governments solution is to throw more money at it instead of solving the real cost problem. The problem is the cost of childcare and this will not be solved by putting more money into it. In fact it's likely to increase the costs. It also does not help solve the basic problem of overpopulation.
Interesting how those many on here claim having paid little tax due to their low income job they are entitled to a hand out because they paid in but those who pay Â£50-60,000 tax a year are not Come on make up your minds should hand outs be means tested or not You cant have it both ways
"This is a boost direct to the pockets of hard-working families in what will be one of the biggest measures ever introduced to help parents with childcare costs." When my partner and I had children we were expected to bring them up ourselves Now I am expected to pay to bring up other peoples children many couples of who earn upto 10 times what I do hardly going to encourage me to vote for them
Wonder what stay-at-home mums will think of this?
2016? It's needed now.
It's a long time to wait and 150K is a very high cap! If I earned that, I would be able to afford childcare!