Childcare vouchers vs new tax-free childcare scheme from autumn 2015

[gallicgirl]

Has anyone done much reading on this or have insider knowledge?

I'm about to go on maternity leave with 2nd child and trying to work out childcare choices on my return to work in November.
DP and I but th claim the full amount of childcare vouchers which I understand saves each of us around £900 a year in tax.

DD will be starting school in September so her childcare costs will drop dramatically as we'll only need 3 hours a day after school. Hard to work out exactly how much we'll be paying but could be approximately £2700 for term time (annually) plus any extra for school holidays. Baby will obviously be a bloody fortune in full time childcare at £12000 for the year.

I understand that under the new scheme we can save 20% of childcare costs up to £2000 per child each year. Therefore it's a no-brainer that we'll be better off using the new scheme for the baby. However 20% of DD's childcare costs could be less than the £900 currently saved on the voucher scheme.

Has anyone seen anything to suggest a family has to choose the same method? Is it going to be possible for one of us to claim the 20% for baby and for the other parent to remain in the voucher scheme?

Also has anyone seen anything about how the new scheme will work in practice? I've read that accounts will be run by National Savings & Investments and eligibility checked quarterly which makes me wonder is payments will be made quarterly in arrears. I shall be stockpiling childcare vouchers while on maternity leave just in case!

Hi Gallic, I'm not too sure but keen to know the answer as in a similar position myself! DC2 due in July and DS only 2 though, so our childcare costs will be 4 days a week for both when I go back to work (less the 15 hours for DS). This makes me think we will possibly be better off with the new scheme but I'm a little hesitant as I don't really understand how that one will work...like you, we will definitely be stockpiling the vouchers whilst on mat leave, particularly as my employer is liable for them whilst I'm on SMP!

Yes, I didn't realise that the employer was liable when SMP and I stupidly reduced mine when on SMP to only £20 pcm. So please please, stockpile as much as you can!

I've just started maternity leave (FTM) and the complete lack of information makes it impossible for me to determine when to return to work in order not to miss out on the existing scheme.
OH will claim childcare vouchers from when baby is born, but I need to be back at work and earning before I can claim.
It actually works out about 50:50 between the two schemes for us, but the employer scheme currently runs to age 16, rather than 12 which swings it slightly.
This table may help you determine which scheme is best for your own circumstances, but the current lack of information about a specific start date, and how the two schemes will run concurrently is annoying, as is potentially returning to work two months earlier than planned!!
www.kiddivouchers.com/taxfreechildcare10things.php

New scheme only runs until child is age 11 if they are Summer born, as it ends the September following 11th birthday.

It is being phased in, so come September will it only be for children under a certain age? So would a child starting school be able to get it?
If childcare cost being done as a family or per child? What if childcare fee is not paid on a per child basis?

There are so many questions about the new scheme which as yet don't have answers. Anyone found any answers?

When it was originally announced the plans suggested you could stay in the voucher scheme for the first child and enter the new scheme with the second child.

There has been nothing since to suggest this is the case. The total lack of information is pissing me off now given the scheme is supposed to start this year. The nursery manager was telling me that even she hasn't had any information.

DD gets her free hours now so we are spending more on vouchers than we need to for her bill and using them towards DS's bill which is fine at the moment. I don't want to get left with vouchers I can't use that can't be refunded though if I put DS in the new scheme and therefore can't continue to use vouchers towards his bill.

Watching with interest.

I'm currently on mat leave #2 and have been claiming the full £243 in CCVs to stockpile, specially now that DD1 is only using her funded sessions whilst I'm off.

Does anyone know if all employers are liable to pay the full childcare voucher amount claimed during mat leave while on statutory or no pay? I currently claim the full amount, and am starting mat leave at the beginning of March. I will be on 3 months full pay, 9 months statutory and 3 unpaid. I've still not managed to figure this out! Thanks.

Twit woo - yes they are.

Ideally you should stop them between weeks 17-25 of your pregnancy to maximise your OMP (as this is based on your average salary during this period and calculated after vouchers removed so by stopping them you get more salary during these qualifying weeks) then start them again.

It's most worth it if you stay off on maternity into the SMP/no pay zone. If you intend to go back earlier you might prefer the cash in your early months.

Yes they are Twittwoo but some will try to get out of it by claiming its not a benefit.

When I get a minute, I'll try to post links to the info I've already found. I tried to look on the money saving expert forums but couldn't see anything relevant. I'm thinking of writing to my MP for help as it's impossible to make plans to return to work at the moment.

Thanks. So, does that mean for my three months at full pay I'll get what I usually get paid (minus the vouchers) minus the vouchers? If that even begins to make sense? So, essentially, the value of vouchers taken twice off my current salary? I didn't stop them so it's too late for that. Do you think it's worth phoning HR to find out what happens? I work for a local authority. Thanks!

as a rule if you're both working you're better off with with new scheme if childcare costs are more than £9330 a year you are better off with new scheme. Less you're better off with existing CCVs

If one of you doesn't work you're not eligible for new scheme.

If you're a single parent your childcare costs need to be more than £4665 to be better with new scheme.

Twitttwoo no. You should get what you would normally get.

Example say someone earns £500 a week and gets £50 vouchers salary sacrifice. Their new earnings are £450 a week. This is what is used to calculate SMP and OMP.

They both need to be paid in full with the vouchers on top. The salary sacrifice is what reduces your original salary. They can't just knock money off your pay as that's not what salary sacrifice is.

Sorry, no advice here, but another question!

I had to leave my scheme when I left my employer, but DH still gets childcare vouchers which are used for DS' nursery.
I am due soon with DD, so my question is, can DH continue to get childcare vouchers, but I can use the new scheme? Or are you not allowed to use both in one family at the same time?

I was also frustrated with the lack of information out there! And the cynic in me thinks it may change after the election...

Something else to consider is that the old scheme reduces your net salary for the high income child benefit reduction, so if your highest earner is between £50k and £60k, you will get to keep more of the child benefit if you are in a salary sacrifice scheme. The new childcare vouchers are not salary sacrifice.

Teaandhobnobs no. One family is not allowed both at the same time.

Also families getting universal credit are not able to get TFC whereas they can get CCVs (although childcare element of working tax credit may be reduced).

Thanks cogitosum that was my suspicion.

Twitttwoo as said above, when on full pay you should get what you normally get with your normal amount of CC vouchers.

When on SMP, you should get normal SMP and your employers pick up the CC cost and you get your normal CC amount credited.

When on no pay, your employer still pays the CC voucher.

My mistake was not realising this and after my full pay, when on SMP, I changed my CC down to £20 a month (from from full £244) so I would have some money and now wipe out my SMP with CC (or so I thought). I was only told by my employer that they would pay it, when I phoned up about CC vouchers when I was about to go onto no pay. Grrrr. Did myself out of over £674 CC before I rectified my mistake.

Thanks to everyone who answered my query. That's the best answer really, as I plan to take the full year if we can get away with it, 9 months of which will be smp or less. Issy, how annoying that you did yourself out of getting the childcare vouchers, it's so easily done though. I did a similar thing with tax credits during my last pregnancy as I didn't understand how the system worked, never having claimed before, and I'm convinced they purposely make it difficult to find these things out! Really appreciate being in the know for this though, so thanks again.

Thank you cogitosum.

I don't suppose you know the 'better off figures' for higher rate tax payers by any chance?

Assuming you started getting CCVs after April 2011 you'll be better off with tfc if you spend more than £3100 per year on childcare. Double if there's 2 of you.

Thank you cogito