Childcare tax breaks for working parents.

[youarewinning]

Please someone explain this to me? There seems to be a £2000 tax break for families where there are 2 working parents.

So does this excude single working families as it excuses families with a SAHP.

Thanks wood burner, that's exactly my thoughts too.

I will still worse off compared to how I was two years ago due to the child care voucher drop to £124 and removal of child benefit. Child care costs are just under £8000 at the moment so won't realise the full £2000.

When dd2 comes along I will still be worse off due to the balance of child benefit being removed, higher child are costs and going back to no free hours of nursery until she is 3.

Hang on, had a thought. What about Increased NI contributions?

I though I read that you could use both - the childcare vouchers AND this new scheme?

Increased NI is included in the figures quoted as 'savings' for the childcare voucher scheme I gave

Increased NI is included in the figures quoted as 'savings' for the childcare voucher scheme I gave

The other thing to consider is that if you go on maternity leave while receiving childcare vouchers, as it is a salary sacrifice scheme your employer has to keep funding them while you are on leave, but may not deduct from SMP (can from contractual if you get full or half pay for a period, for example). This would be a big loss to anyone who only receives SMP. I guess this wouldn't happen with the new scheme. Which is better for employers, certainly...

Ahhhh. Still no better off then.

How exactly does this help me then Mr Cameron?

And I think is probably one of the main reasons why employers will want to stop doing childcare vouchers once there is an alternative that can be used.

I'm fully expecting my employer to withdraw from the CV scheme in 2015, but DH's won't (because he owns part of the firm and gets to make these decisions), so I will have to investigate if I can contribute to the new scheme while DH is still receiving CV's.

Second calc - from September 2015 onwards, our childcare costs will be approx. £8000 pa. Therefore new scheme savings are £1600 pa. Still worth us staying with the old scheme as we get DH's savings of £1225 + the CB withdrawal of £714 = £1939 pa.

However, what I think will happen is that by then DH will be earning above the £60k even after voucher deductions, therefore the CB withdrawal ceases to become an issue and we would be better off joining the new scheme. Possibly.

Who knows...

WoodBurner - wouldn't you get £2,400 under the new scheme, though, if your childcare costs are £12,000 for more than one child? The £2k limit is per child, not per family. Not saying your conclusion would be any different based on your calculations, just thought I'd point this out.

The way I read it, is that your childcare will need to cost a total of £10,000 per child for the government to pay the full £2000 per child towards it - is that correct?

I had read it as that was the maximum in total? Yes it would change the calcs, but only until this September, when our costs should drop below £10k. But thanks for pointing that out, it will make a difference to some people.

MollyWhuppie - its a maximum per child it appears - so as I have 3 children, I can get relief on up to £30k per year - £6000. I actually pay £12,000 per year, pretty evenly spread over the kids, so I should get £2400 relief.

At this moment in time, we would still be worse off because of the child benefit withdrawal.

But everyone is going to have to do their own calculations...

So it's only really beneficial to those on the old scheme while they are paying huge nursery costs - once the childcare costs go down a bit when the children are in school you will not be better off? Maybe this is a ploy to get all those on the old scheme to move across to the new one.

Suffolk - answer here: www.gov.uk/government/uploads/system/uploads/attachment_data/file/293082/your_detailed_questions_about_tax-free_childcare_answered.pdf

oh dear what a load of shit this goverment is

just give everyone the child benefit back

Do anyone know if you will be able to use the money in the account to pay private school fees?

Support for child care costs are great. It would be nice to see children of sahp's supported too. Sahp's have no income of their own, so even without paying childcare costs they are financially worse off than working parents.

SAHPs have no income because they are not in paid employment. I really don't get why this always come up when childcare assistance for working parents is discussed. If you choose to be a SAHP, then surely you know that you won't get paid to do it, though the non-financial rewards are usually said to be way more important (and are the reason most SAHPs choose to do what they do). There is always the option to go out and get a job, if being paid is that important to you.

LaLay

I expect(hope) the way the government looks at this is, what is the economic benefit of paying 20% towards childcare costs for parents with one SAHP. If the SAHP plans to work then there is a benefit as they will be contributing to the GDP/paying NI/tax etc (but then they cease to be a SAHP anyway). What other reasons would you need childcare and what is the economic benefit to the nation. Everything has to be paid for by all of us who do work and pay NI/tax, so everything has to have either a clear economic benefit or a high moral value (for example, funding pensions/healthcare etc. is something most people agree on).

I think if a SAHP can make this argument effectively (as opposed to the cliched person they always put on the radio whose only argument seems to be, it's not fair, we feel undervalued, why should we not have it, etc etc) then there may be something worth exploring. But I haven't heard a decent argument articulated yet.

Bumble

Working parents are assisted with childcare on top of the free 15 hours given free for pre school.
Why are children of working parents in more need of a pre school education?
Wtf has pre school education got to do with economically benefitting the GDP, whether the parents work or not.
I don't think anybody suggested they should be paid as a sahp but argue for the same conditions for education.

I'm not bothered as have never used childcare, would rather do it ourselves. Neither did we bother with pre school and did this ourselves.
However, it is wrong to assume that all sahps are the same and education should be the same, whether working or not.

Although we won't get this at the moment as I'm SAHM, I'm pleased its coming in- DH is self employed, and therefore could get nothing under old scheme. My employer (was some time ago now) had the voucher thing, but you could only join it once a year & didn't tell anyone about it so very few people befitted.
If I go back to work- as long as I earn more than £50 a week -we could sign up for it.
Sounds good to me. And it does seem (for once) that they've thought through single parents, parents of disabled childrens etc.

Why don't they subsidise the nurseries and/or offer more free hours for every child when they start nursery. This will be a much better option, not just giving peanuts and expecting a praise. All childcare help should be available for every parent in my opinion, no need to penalize students or disabled.
Not much will change with this new proposal, not noticeable anyway.

"Why are children of working parents in more need of a pre school education?"

They aren't. Quite the opposite, actually. The 15hrs universal pre-school provision is entirely designed to ensure that it is accessible to everyone, regardless of income.

You don't HAVE to take it as an SAHP. You can take it up, or look after your pre-schooler at home, or use alternative childcare (nursery, nanny, childminder), whatever you want.

If you work you can take it up, or use alternative childcare. If you work, you probably have to pay for the ADDITIONAL childcare you need to fit those 15hrs around your working week (so actually some children of working parents are LESS likely to have access to universal preschool provision given that most working parents need longer hours/school holiday coverage than pre-schools can provide).

Yes, for some parents those 15 hours help tip the balance of childcare being affordable or not, but they are not there to boost the country's GDP directly. They are there to make sure all children have access to SOME Ofsted-quality childcare and are prepared for education.

morethan

I think you're confusing or at least conflating pre-school education with childcare.
Childcare typically needs to cover 10 hours per day, 5 days a week, to allow a parent to get to work, work, and get back home again. So we're looking at approx 50 hours a week cover. It is not education, it is care.

15 hours pre-school is all very well but it's actually fairly irrelevant for working parents, covering only approx 30% of the hours actually needed. As well as that, not everyone uses a nursery/pre-school (childminders/nannies etc) and some nurseries/schools don't accept the funding anyway - which was my experience incidentally. So I see childcare as a separate area to pre-school, whereby pre-school IS education based and indeed is open and available to everyone on the same terms.

However it just brings me back to the same point, why do SAHPs need childcare?