Government's "new" great childcare plan....

[duende]

I know there was a thread about it here a few weeks ago, but now a bit more detail is available:

parents to get 20% of childcare cost back

Now, I can't help but see it as a bit of a con. First of all, annoyed by how they sell it - our childcare bill is closer to 10-12k, so £1200 per year is NOT 20%.
Also, at the moment, both me and DP get the full amount available in childcare vouchers, which they will abolish. I get £243 per month, DP gets £220, and I am a higher tax payer.
Surely we will not be better off with this great new deal they have come up with?

Also, this will only be available to families where both parents work, current childcare voucher scheme is not restricted this way.

Am I missing something here, or are they about to screw people over again whilst dressing it as a positive move??

ceeveebee - not as I understand it, if that family is already claiming two sets of vouchers and has children over 5. We will lose £900 a year if DH changes jobs and has to stop claiming vouchers. That's £900 we can ill afford. I'm a student, so we need full-time childcare, but only DH can claim for now. Under the new scheme, neither of us will get a bean.

If they extend the scheme to over-5s, and if they still give one parent the tax-break if the other is a student, maybe then it would be more fair.

Yes but I think just from an admin point of view. It's not clear.

Also doesn't help those parents returning to work or finding more employment once children start school.

And obviously if you change jobs you will lose it.

But only 2 children under 5 ceevee.

In my case, I would have been better off for 18 months but worse off for the 3 years either side.

You all do realise that by mentioning that you get £243/month you lot are advertising that you are upper tax bracket?

I don't want to engage in politics of envy... but I'm surprised no one else has pointed that out. Could be an argument to say that those receiving £243/month are the ones who least need £243/month subsidy on childcare.

£243 a month is the lower tax bracket.

Or I should clarify it is the lower if you join the scheme after April 2011. The 40% limit is now £142 I think. Prior to April 2011 every one gets £243 so the higher rate tax payer gets more tax relief from it.

A clear message to full-time mothers and volunteers

It appears that the new childcare package, marketed as a helping hand to working parents, simply takes money from single income families and gives it to dual income ones.

The government seems set out to penalise the following:

1. Women who had to give up they careers because, until now, their job paid less than the cost of childcare.(Their partner could claim child care vouchers until now. The new move takes this opportunity away)
2. Stay at home mothers who sacrificed the benefits of a dual income, because the alternative was to outsource their children completely.
3. Workers whose partners have chosen to nurture the government's beloved Big Society by volunteering and effectively working for free, (or who simply cannot find another job after maternity)

If I understand correctly, a dual income household earning just under 300 000k can claim back tax on their childcare, but a single income household on 60 k, where one partner is a volunteer or full time parent, cannot.
*
Complete disdain toward full-time parents

The governments in most developed countries acknowledge, through tax rebates, the financial sacrifice made by single income families. Presumably they do so because they believe that a ?stay at home mother? is actually performing a worthy service. Does it really make no difference whether a child spends all their time with a salaried third party rather than their parent?

When the coalition took child benefit away, it expressed a complete disregard for the choices made by single -earner families. With yesterday?s budget, they are punishing them further by taking away their opportunity to use childcare vouchers.

They have converted indifference toward full time mothers into obvious disdain.

Cynicism or incompetence?

The government statisticians must have calculated that single income families are not a significant tranche of the electorate. Alternatively, its hypocrisy in praising family values and touting a "Big Society" is now overshadowed by blazing incompetence.

Lljjk, I am not in the upper tax bracket.

£243 tax free is standard amount.

What newpencilcase said.

Aw nuts, I stand corrected, especially if rules have changed (how confusing!). Should have double checked sources.

No one actually knows for a fact how the transition to the new scheme will work. Lots of assumptions being made about whether parents will still be able to stay on voucher scheme for age 5-12 or if moving jobs or whether students will be included . None of this detail has actually been announced yet as there is a consultation process that hasn't started yet.

We need to get MNHQ to take part in the consultation process

Actually there has been some detail of the plans published including this FAQ which confirms that "We will close ESC [Childcare Vouchers] to new entrants only from autumn 2015. This means that anyone who is in a scheme before then can choose to remain in it, or switch to the new scheme if they are eligible;"

Also "Q. If I move jobs will I be able to claim ESC in my new job if they have a scheme? A. No. If parents leave a scheme, they will not be able to join another, but may be eligible for the new Tax-Free Childcare scheme."

However for students there is only the uncertain "We expect some [faimilies where one partner does not work to benefit], for example, where one parent is unable to work as they are a carer or disabled, and will consult on whether other circumstances should be taken into account." - I would have though full time education would be one of the most obvious "other circumstances" to consider, but that is no guarantee.

Thank you MrA.
Those questions all relate to children up to 12.

The question they haven't answered though is in relation to children aged 5-12 and how the scheme will phase in for this group as this is still subject to the consultation process- I find it unbelievable that neither the voucher scheme or this new scheme will be available for the transitional period.

"If they are a carer" - aren't SAHM who can't afford to work carers too? Surely the term doesn't just apply to those who still have elderly relatives or a disabled partner?

Oh I see what you mean ceeveebee - in "late 2015" when the new scheme comes in it will only be for under 5s but the existing scheme (for up to 16 year olds) will be closed for new entrants. This will obviously be tough on those who are in a scheme but change jobs, as they won't be able to re-enrol and may not qualify for the new scheme according to whatever roll-out schedule there is for older children, but I can't see the draftsmen losing much sleep over it - this is exactly the situation higher rate taxpayers in a pre-2011 scheme are in now.

Post 2011 I think you mean. Pre 2011, DH could have £243, after changing jobs and therefore schemes, he can only have £124.

No I mean pre-2011. Before your DH changed jobs he was in a pre-2011 scheme and he lost out because he left that scheme when he changed jobs. Now he is in a post-2011 scheme he will not lose out if he changes jobs.

£243 is the standard amount that can be claimed. I'm a lower rate tax payer and get this much. Also, DH has his own business and has been able to get vouchers, not sure how though. He just joined the same scheme as me.

So, does this mean if I change jobs I can't get vouchers any more? And if I do, and join the new scheme can I not get help toward after and before school clubs once the dc's turn five?

I hate the bloody bastard Tories

sausagedogfan I'm not sure how it works, but I think any employer can sign up to the scheme, no matter how small they are? So your DH signed his company up and then offered it to himself? I don't see why he can't? (Unless maybe you also have to be VAT registered so it excluded those smaller self employed businesses)?

"So, does this mean if I change jobs I can't get vouchers any more?"

If you change jobs now, or any time before the new scheme starts (at least late 2015), you can get vouchers as long as your new employer provides them.

"And if I do, and join the new scheme can I not get help toward after and before school clubs once the dc's turn five?"

This is correct, although it was announced that the new scheme will be extended for children up to age 12 "later". The details of this scheme are yet to be worked out and there is no indication of how long "later" will be, also note that in the current scheme you can get vouchers up to age 16.

I have also heard a rumour that the current scheme will be scrapped even for existing members after 5 years (not sure if this is from now or from 2015) - anyone have any confirmation of this as it is not in the information I have been given?

I have only read that the existing voucher scheme will continue to run for existing members but closed to new claimants after 2015. If you are getting vouchers now, you can stay put.

What I don't get is how they can run two systems side by side but with the same entitlements.

Surely, even if you stay in employer scheme you can't claim as before as they are grouping couples claim.

So, can DH continue to claim £243 a month, but I have new voucher account and claim £1200 per child?

Presumably not, but how much admin will all that take to unpick who's claiming what, who's employed by who.

And can he continue to claim if I'm not in work and/or DCs are over 5.

That's what I'm waiting to find out too. Will it be worth him changing or not? I suspect not as we might need the vouchers / salary sacrifice to limit his tax for CB but who knows where he will be by 2015 or even still in a job.

A lot of childcare providers for older children will not accept the vouchers. In my area childcare providers who accept the vouchers charge more than those who don't which more than slightly defeats the object.

I fear the IT costs of setting up this new system will be horrendous. Yet more tory stupidity in action.