January 31 2015 Latest news:
Wednesday, March 19, 2014
It must be election time if childcare is top of the news agenda again.
The scheme will open in autumn 2015 and be available to around 1.9 million working families with children under 12 by the end of its first year of operation.
New online Tax-Free Childcare accounts will be run by HM Revenue & Customs (HMRC), in partnership with National Savings & Investments (NS&I). The accounts will make it easier for parents and providers, involve no fees and give parents security over their money, allowing them to build up credit for use when they need it most, for example during school holidays.
The scheme will also benefit childcare providers, who will be able to receive each child’s payment from a single account under Tax-Free Childcare, rather than keep track of multiple payments relating to a single child from different bank and voucher accounts.
For the first time, self-employed parents and those working for the vast majority of employers who do not offer the existing ESC scheme will be able to access the scheme. It will also be available to those working part-time due to the low minimum earning threshold of £50 per week.
The rules will also be tailored to support entrepreneurs and those self-employed who do not at first meet the minimum earnings requirement to be eligible for the scheme in their first year.
All working families where the parents earn at least £50 per week will have access to government support with childcare costs, unless one of the parents earns over £150,000 or receives support from tax credits, Universal Credit or ESC.
Parents currently receiving childcare vouchers through ESC can continue to benefit from the scheme with their current employer should they wish to do so, but it will be closed to new entrants from autumn 2015. Workplace nurseries will be unaffected.
Families in Universal Credit will be able to receive 85pc support on childcare costs, up from 70pc.
This change will see 300,000 working families getting more out of the money they earn.
The buzz statistic of the last few weeks is that, for many, paying for someone to look after your child costs more than a mortgage.
“Surely not!” the critics shout. “Where did this nonsense come from? Show us the facts to prove it.”
I can’t speak for everyone in the UK but this is certainly the case for my husband and me. At face value, childcare for our son costs over £100 a month more than our mortgage, and is about to go up.
Luckily, we are signed up to a tax-saving childcare voucher scheme at work, which brings the cost down, but still does not make me going back to paid employment the clear financial winner.
And there is so much more to the work versus children debate than politicians seem to acknowledge.
Last year, I took the difficult decision of leaving a full-time, well-paid job to spend more time with my son, who was 11 months old when I started working three days a week at the EDP. I spent months agonising over the best choice for our family. Do I go back to a busy full-time job and provide for us financially? Or do I try to find part-time work so I can spend more time with my son and keep the house running? There was a lot of guilt. Comments included “how can you let someone else bring up your child?” and “what’s the point in having a child if you go back to work?”. There were even books by child psychologists suggesting my son would grow up to be a criminal if I didn’t stay at home and look after him. I was selfish for wanting to continue a career I had spent nearly 10 years building and then irresponsible for letting a better salary go to take a part-time job.
And I was lucky enough to have the choice. There are many women out there who don’t and either have to leave their babies full-time, or cannot work at all due to the cost of childcare.
Each extra hour of work is an extra hour paid to a childminder or nursery. We just cannot win.
None of this is helped by the contradictory messages coming out of Downing Street. The government wants mothers to go out to work but has so far made this financially difficult. It bills itself as pro-family – but does not respect that staying at home to raise children is a natural and important role – and one, which according to some psychologists, could make for a better society in the future.
Mr Cameron and Mr Clegg, I am that working mum you applaud. But the whole way along, I have felt like I’m pushing against the tide. And there are plenty of women much worse off than me.
Yesterday’s announcement is good news for working parents but for me, comes too late. I know this government does not really care about our issues. These plans are just another carrot on a stick leading us to the polling stations.