Wednesday, 16 January 2013

Government to Make Changes to Help Families with Childcare Costs




The UK is eagerly awaiting an announcement by the government about plans to change the help parents receive to pay their childcare costs by introducing a new system to replace the £700 million Childcare Voucher scheme.

The Childcare Voucher scheme is free for the government to administer.  Therefore, the question on everyone’s mind is ‘why is the government suggesting spending money on introducing a new system when the current Childcare Voucher scheme is a confirmed success’?  The main reason the government is making changes is to rebalance the help parents receive with their childcare costs and to give parents the incentives to go to work. Currently only employed working parents, both mums and dads, are entitled to use Childcare Vouchers, providing by doing so they are not taken under the National Minimum Wage limit.  However, it has been proven that Childcare Vouchers are a great method for encouraging parents into work.  In a recent survey by Busy Bees Benefits, 1 in 3 parents, when asked “Do you believe the provision of Childcare Vouchers influenced your decision to return to work or remain with your current employer after you had a family?” answered “yes”.

Busy Bees Benefits CEO, John Woodward said “rather than introduce a totally new system and discarding one which already works, the ideal solution would be to for the government to make changes to the current Childcare Voucher scheme, which would be more beneficial to both parents and the economy.”
One question we would like answering is; how will this new system work and how will the government monitor where and how parents are spending the money?  Payments to childcare providers are traceable under the established Childcare Voucher scheme and carers find receiving payments “simple and straightforward”*

The current Childcare Voucher scheme ensures that parents use only registered providers, making regular checks to certify their registration, ensuring the safety of using a particular provider and the quality of care children will receive.  Will the new system have a regulation process to ensure that parents use their allowances to pay for Ofsted or equivalent, registered childcare providers?  It is believed that £265 million of the £1,606 million working tax credit system was estimated to have been claimed erroneously in 2010/11**, how will the government ensure this does not happen with a new system?

If the government listens to the numerous calls to extend the Childcare Voucher scheme, this could solve the problem for many working parents:
  • Increase the cap on Childcare Vouchers.  Working parents are currently allowed to exchange up to £55 per week from their salary for Childcare Vouchers***.  Busy Bees Benefits are running a campaign to increase the allowance to £75 as the current cap has not changed since 2006, although childcare costs have continued to rise during this time.  At the heart of their campaign is an online petition which can be signed here - http://epetitions.direct.gov.uk/petitions/31669.  Increasing the cap would increase savings, making parents’ childcare costs more affordable.
  • Extending Childcare Vouchers to self-employed parents would allow more parents to receive help with their childcare costs.  This would allow self-employed parents to receive the same amount of support as parents in employment.  The scheme could be easily adapted with minimal administration changes.
  • Increase access to the scheme.  Employees should have a ‘right to request’ which would mean employers have to offer the scheme.
  • Allowing working parents on National Minimum Wage to also use Childcare Vouchers.
The proposed changes have suggested that only parents with children under five will benefit.  The provision of childcare vouchers doesn’t only help parents with young children; it also allows parents to save money on childcare costs for older children.  

What will be announced is still unknown; however there is a real need for the government to help families now and allow parents to return to work without childcare costs being a heavy financial burden.


Ends
Notes
  • *Quote from a childcare provider responding to the 2012 Busy Bees Benefits Customer Survey.
  • **http://www.newstatesman.com/politics/2013/01/coalition-needs-improve-quality-childcare-not-just-cost
  • ***Basic rate tax payers.  Higher rate can have up to £28 per week and Additional rate can have up to £22 per week, depending on individual circumstances.
  • 577 parents responded to the 2012 Busy Bees Benefits Customer Survey. When asked “Do you believe the provision of childcare vouchers influenced your decision to return to work or remain with your current employer after you had a family?” 32.1% answered “yes”.
  • Busy Bees Benefits is part of the Busy Bees Group, the UK’s largest childcare provider, operating 214 nurseries. Its Childcare Voucher scheme helps working parents to save money on childcare and their employers can offer this valuable benefit at no cost to the organisation. Parents can also receive an additional discount if they use a Busy Bees Voucher at a Busy Bees Nursery. The company also offers a range of employee benefits.
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For further information about the Busy Bees Childcare Voucher scheme, visit www.busybeesbenefits.com

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