Guest blog: What the Tax-Free Childcare Scheme means for single parents
This Tuesday, ahead of the Budget, the government announced a Tax-Free Childcare money-back scheme which would entitle working parents to get 20% of the cost of their annual childcare costs. In this post, Caroline Davey from single parents’ charity Gingerbread gives their verdict on how the proposals will affect lone parents.
Read the blog and let us know what you think on the Talk thread.
More money for childcare – sounds good doesn’t it? I mean, what’s not to love about the government finally taking heed of the millions of parents who’ve been telling them for years that childcare costs are one of the biggest hurdles to going back to work, and probably the biggest expense for families after their housing costs. Congratulations all round, right? Well – yes and no.
Let’s start with the positive. In an era of widespread cuts, it is an achievement in itself for the government to recognise so clearly that childcare costs are a critical issue for working parents. While we know the coalition has been arguing for ages about what its new childcare ‘package’ would look like (this announcement was originally due to take place in January), there was at least a firm agreement that the government needed to invest more in childcare.
And we shouldn’t underestimate what an important shift that is – let’s not forget this is the same government that thought nothing of slashing 10 per cent off childcare tax credits back in 2011.
Childcare’s a huge issue for all families, but it’s even more important for single parents who have to juggle work and caring for their children alone. Single parents have long told us at Gingerbread that the costs of childcare are one of their biggest barriers to finding decent, well-paid and sustainable work. This announcement seems to level the playing-field for them.
But – and it’s a big but – what does this new announcement actually mean, for parents who rely on childcare to let them work, for single mums and dads with no one else to split care and cost with? After all, talk is cheap – nursery places certainly aren’t.
Let’s delve a little deeper. Here’s what we know so far.
1. We have to wait two years before additional support kicks in
First up, this announcement won’t mean anything at all until 2015. So while parents are struggling to pay for childcare today, this month, this term, this year amid ever-tougher strains on their family’s finances and above-inflation childcare price increases, no more help will be forthcoming.
We all have to recognise the country’s fragile financial position – to be honest, most of us would probably argue that our families are living it. But how can a pointless reduction in the price of beer be announced in the Budget on Wednesday and implemented from this Sunday – that’s costing us £170 million next year alone, by the way – but we have to wait a whole two years for more investment in childcare? In a time when most of us are doing at least some number-crunching on our spending, that one just does not add up.
2. Additional investment will only apply to childcare costs for under-fives
This is particularly unlucky for those of us with three year olds, who are struggling now but whose children will be over the age limit by the time the support kicks in.
It also represents one of the biggest challenges for single parents. Since May 2012, single parents with a youngest child aged five have been required to seek work – up until that point, they are entitled to stay at home with their youngest and claim income support. So just at the point when single parents are compelled to go out to work (if they’re not already working), the extra support for childcare drops off. Yes folks, that’s what we call joined-up government.
3. We still don’t have all the answers
There are myriad more questions that need to be answered before we can say with any certainty what childcare support will really mean for families. Here’s a few to get the ball rolling:
- Who in government came up with the £6K average annual cost figure? Daycare Trust puts it at more like £11K for a full-time nursery place
- What’s the logic for only giving the additional help to low income parents earning enough to pay income tax – especially when the tax threshold keeps going up?
- Will parents currently claiming childcare vouchers actually be any better off?
- Why will parents earning up to £150K get the same help as those earning far less?
I could go on.
The childcare announcement’s a mixed bag – it sounds promising, and in many ways it is, but then there’s that two year delay to consider, the lack of clarity to work through and the flimsy figures to scrutinise. For single parents, it’s a step in the right direction towards a more manageable balancing act between work and home - but it certainly won’t take them all the way there.
Gingerbread’s current campaign is to Make it work for single parents; the childcare announcement doesn’t manage this, yet.