As you will probably be aware, the Government has offered 30 hours of free childcare a week for children aged 3 and 4 from September 2016. We’ve had lots of questions from parents about the scheme and hope that you’ll find the following information that was recently published in Families magazine useful.
When does the scheme start?
In September 2016, but the scheme is not launching everywhere at this time. Instead, it will be piloted in some areas, and these are still to be determined. There is currently still no indication as to when the scheme will be available nationally. Buckinghamshire is not part of the pilot scheme and the scheme will not start in this area until 2017.
Which parents will be entitled to the 30 hours?
Unlike the current scheme, under which all parents of 3 and 4 year olds are eligible for 15 hours of free childcare a week, the additional 15 hours will only be available to working parents. A statement on the Government website says it will support up to 600,000 working families, but it is not clear at this stage how many hours parents should be working to qualify as “working parents.”
Which children will be eligible?
Children aged 3 or 4 in September 2016 living in the pilot areas with working parents (as stated above, the definition of ‘working parents’ remains unclear) who have an annual household income of less that £150,000.
Replacement of childcare vouchers with tax-free childcare scheme
Last year, the Government’s proposals for delivering Tax-Free Childcare were found to be lawful by the Supreme Court and the changes should come into force early in 2017. The Tax-Free Childcare scheme will replace the current Childcare Vouchers system, although, parents who are currently signed up to the Childcare Vouchers scheme will be able to continue using it.
The key differences between the two schemes are as follows:
The current Childcare Vouchers scheme is a tax and National Insurance saving scheme, offered as a benefit from the employer of a parent, but only where the employer chooses to offer the scheme.
The new policy is expected to be open to all working parents who meet the set criteria. Where both parents work, families can save around £1,800 a year under the Childcare Vouchers scheme, but will save £2,000 per year under the new scheme. Self employed parents will also be eligible for support under the Tax-Free Childcare scheme.
Under new proposals the Tax-Free Childcare scheme will only be available to one earner in a family where both parents are working. Families with a single earner will be excluded. You can find out more here