Childcare in the news ahead of the budget tomorrow

[Simona]

Looks like the govt has pulled a trick...the expected tax free childcare package expected to be announced in the budget tomorrow and worth £1,200 is now £2,000

This has just been announced so more news will follow I am sure

All in all plenty for parents but what is in it for providers?

[Mouse]

I think the government forgets that childminders and childcare workers are also, very often, working parents. It seems they want to 'help' those using us, but forget to help us at the same time

[Simona]

I think the government forgets that childminders and childcare workers are also, very often, working parents. It seems they want to 'help' those using us, but forget to help us at the same time

Looks like the 'at home mothers' are none too happy
one of them, who is very often in the news, agrees that, unless our costs and funding for subsidising the 'free childcare' are addressed there will never be a solution...

By the time this £2000 kicks in 2015 the cost of childcare will have gone up again...more research will come out to bash us as greedy and we are back to square one
This is nothing but an election gimmick which I hope the parents will see as just that.

This is the first of many articles that will undoubtly come out today...nothing in there about providers
BBC News - Free childcare allowance to rise to a maximum of £2,000

[mum2two]

I love the way they write articles....

Full time care costs £11000 a year. What they haven't said is that that isn't for 37.5 hrs a week - but generally ft care is 10 hrs a day - so that's for 50 hrs a week!!

Work that out over the year, and it's £4.23, which is prob average over the country - and has been for years....

And from that money, there's resources, food, outings, wear & tear.... Yes the more kids = more money, but in turn increases expenses! So in all fairness - £11k isn't really that much to provide for someone else's child for prob more hours a week than the parents do!!!

[tess1981]

A full time child here averages about £6000 a year.... mmmmmmmm I must b rich lol

[Simona]

4Children have summarised the govt tax free childcare and more on their Foundation Years website...we will of course hear more tomorrow in the budget


Tax-Free Childcare
The new tax-free childcare scheme will be increased to £2,000 per child and extended to all children under 12 within the first year.

This new childcare package will benefit almost 2 million families and will help parents to go out to work if they want to and provide more security for their families, while directing extra support to those children from disadvantaged backgrounds.

The government will provide 20% support on childcare costs up to £10,000 per year for each child via a new simple online system. The limit had previously been set at £6,000. This now means support of up to £2,000 per child per year.

The scheme will be introduced much more quickly than previously announced with all working parents covered within the first year from autumn 2015. Previously children under 12 would have gradually qualified for the scheme over a 7-year period.

The government has released a list of top 10 things parents should know about tax-free childcare. You can view that here

Early Years Pupil Premium
A new Early Years Pupil Premium will be introduced to help ensure children get the best possible start in life. £50 million will be invested in 2015 to 2016 giving early years providers more support to help those from the most disadvantaged backgrounds. This will help providers employ more highly qualified staff, for example, or to increase access to services such as speech and language specialists.

85% of childcare costs to be met under Universal Credit
To help more families move off of benefits and into employment, the government intends to cover 85% of the cost of childcare for all families receiving Universal Credit, which would be around 300,000 families.

[Simona]

More info here

Pupil premium extended to early years as tax-free childcare scheme expands | Nursery World

[Jayse74]

I am half-expecting them to turn around and only offer this to nurserys, on-site school wraparound care/clubs and agency childminders!

I always think like this. You just never know whats around the corner.

[rickysmiths]

What they don't say is that those using part time childcare who can at present use the Childcare Vouchers and save up to £900 a year say with one working parent and one child will be worse of under the new system. Say their fees are £3000 a year and they presently draw down £243 a month to save the £900 odd a year. Under the new scheme the make saving would be 20% of £3000 which is only £600.

Where it really helps is that it can be applied to all children. They have changed this because originally it was for up to 2 children.

What I want to know is how are they going to pay for it? As a country we are in debt anyway. I wonder if after the election the rate of tax will go up a couple of pence?

[Simona]

A few more views on the matter of free childcare here
£2,000 childcare tax break for working parents welcomed by nursery organisations

...and these tweets are from Paul Lewis the expert who does Moneybox on BBC...not sure he agrees with the tax free childcare...wish I had his mathematical brain!!

Govt child care scheme is nothing to do with tax relief. Qualifying parent, qualifying scheme, cost up to £10,000, state will pay 20% of it.

New childcare subsidy available where both parents earn at least 8xmin wage/week (£52) (including self-emp) but neither >£150,000/year

No special rule for single parents to qualify for childcare subsidy - they will have to work at least 8 hours at minimum wage = £52 a week

Govt 'Tax-Free' childcare subsidy isn't tax-free because (a) non-taxpayers get it (b) 40% taxpayers only get 20% off (c) not free of NICs.

[Simona]

What they don't say is that those using part time childcare who can at present use the Childcare Vouchers and save up to £900 a year say with one working parent and one child will be worse of under the new system. Say their fees are £3000 a year and they presently draw down £243 a month to save the £900 odd a year. Under the new scheme the make saving would be 20% of £3000 which is only £600.

Where it really helps is that it can be applied to all children. They have changed this because originally it was for up to 2 children.

What I want to know is how are they going to pay for it? As a country we are in debt anyway. I wonder if after the election the rate of tax will go up a couple of pence?

Is the 'tax free childcare' what it is meant to be?
According to some ...NOT

Alex Wild: Tax-free childcare or childcare benefit? | The Conservative Woman

[rickysmiths]

Well no it is not because it is calculated differently and is available to non tax payers which the current salary sacrifice Childcare Vouchers are not.