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Breaking News March 14th 2018 Childcare scheme gets six-month reprieve

14 Mar 2018

Education Secretary Damian Hinds made the concession during a Commons debate yesterday March 13th.

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Childcare Voucher increase improves childcare, grows the economy, and leaves more cash in parents pockets


The case for a better deal for hard-pressed working parents is about to be pushed right to the top of the political agenda. Working mums and dads and employers have launched a petition here and hope to gain enough signatures to have a parliamentary debate on key proposals for improvements to the current childcare voucher scheme. Once the figure of 100,000 signatures is reached, the government is obliged to make time for a debate in the Commons.

Whether you're a working parent struggling to make ends meet in these difficult times, a mum or dad who would like to return to work or an employer trying to keep the business afloat through the current recession, this debate has important implications for you.

A Better Deal for Working Parents

Childcare vouchers are already helping thousands of working mums and dads meet the costs of their childcare. The current scheme was launched in 2005 but the maximum amount that employees can save has not been increased since 2006. The proposals urge the Treasury to up the limit from £55 a week to £75.

Under the voucher scheme employees can directly allocate up to £55 a week from their salary to purchase childcare vouchers. The money paid under this arrangement, which is known as ‘salary sacrifice', is completely free of tax and national insurance payments, saving the individual over £900 a year on their childcare bill.

Thousands of working mums and dads have already taken advantage of the scheme, but many have found that, with no increase since 2006, the gap between the value of the vouchers they purchase and the actual cost of childcare is widening. With the increase that the petition proposes, the potential saving will be raised to £1,200 a year, or twice that if both partners opt into the scheme.

Put simply, the proposed improvements to the scheme will mean:

A Better Deal for Employers

The voucher scheme also offers enormous benefits to employers and, if the numbers who are encouraged to join increase due to these proposals, the benefits for employers will be increased too.

The most obvious direct benefit the scheme gives employers is that none of the money staff sign over towards childcare vouchers is subject to employers' national insurance deductions. This can potentially save even a medium-sized company thousands of pounds each year. That's money that improves cash flow, enhances the viability of the business and, potentially, saves jobs.

On a national scale, this could be a real boost to industry, commerce and the economy as a whole. At a human level, an improved childcare voucher scheme makes it easier for working mums and dads to come back to work, thereby allowing the employer to retain people who have valuable skills and experience.

In short, the scheme gives employers:

Act Now

Work is important to all of us; not just to put money in our pockets, but to give us a sense of achievement, contact with other people and a feeling of self esteem. Working mothers and fathers are amongst the most experienced people in our national workforce and, more than ever before, business needs to retain their valuable skills. The proposals in this petition are about making a good scheme even better; to make its benefits accessible to more and more working mums and dads. We urge you to do your bit to support it by signing the e-petition here.

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