childcare vouchers or tax credit??!!

[tinker316]

Hi!
My dd is attending nursery 3days a week from next week.
The total each month will be £494 - would i be better off using the childcare vouchers through my employer or claim it through child tax credit?! I am so confused!!
I am a single parent who works 22.5hrs a week + earns roughly 9500 per year- any advice will be great!!

Tax Credits will be more of a reduction in costs on your income than child care vouchers. However, 22.5 hrs won't be enough to qualify for Working Tax Credits as a Lone Parent as of April next year, you will still get help with the child care costs through Tax Credits, but you will lose your WTC if you don't do 24 hrs a week from April 2013.

Can you post a link to and HMRC or DWP site that says lone parents have to work 24 hours a week? It wasn't in the budget.

I thought the 24hour rule applied to couples and that lone parents could claim WTC with 16 hours.
It was in the budget the previous year

When you are on a low income IME it is better to claim via childcare element of child tax credit which pays 70% of your costs

Can't post links from phone, but the change comes into force in the new Tax year. It's just that they have done it to couples a year earlier.

Cogito -it's not on there yet as it doesn't come into force this tax year, but next. Just a heads up. My local DWP are even warning Lone Parents not to bother taking work of less than 24 hrs a week now, unless they can guarantee getting the extra 1.5 hrs a week in April, or they will not get WTC, just like they have done for couples this year.

I am lucky to have work as it is!!
Least i have plenty of time to try + get a few extra hours!!

If it hasn't been officially announced, aren't all these heads ups and warnings rather alarmist? From my reading of the Universal Credit white paper, the commitment is to make it worthwhile to work 14 or 15 hours. Says nothing about 24 hours.

The 24 hour rule is for couples I.e. at least one parent needs to work 24 hours. Doesn't apply to lone parents.

Link here
Scroll down to Couples with children - new working hours rules for Working Tax Credit

They will pay the 70% child are if you work 14 / 15 hrs as a lone parent from next April. Where do you think the money for that us coming from? It's coming from the reduction in outlay to Lone Parents working 16-23 hrs who would have got WTC. Budget shuffles, really.

If I'm wrong, I apologise, but as far as I am aware, it is to be announced in the October budget this year.

If it's not been announced I think people should go with the status quo. It would be tragic if someone passed up a good part-time job on the strength of a rumour, only to find it was incorrect.

There's a link here to HMRc's calculator - if you complete with your details it'll work out whether you're better or worse off with vouchers and by how much. As a guess I'd say you're better off with tax credits

www.hmrc.gov.uk/calcs/ccin.htm

The reason you could lose out is that whatever you get in childcare vouchers comes off your childcare costs that can be paid through childcare element of tax credits.

So if you could get the maximum of 70% of childcare costs paid through childcare element of tax credits, you'd get £345.80 a month through that component of tax credits (70% of £494). If you got max chidlcare vouchers (£243) you'd only get £175.70 (70% of £251) so the savings through childcare vouchers (£77.76 a month) wouldn't be worthwhile.