Working parents – will you be £1,300 worse off???
In this week’s Sunday Times (Money section), Ali Hussain wrote that “Families could be £1,300 worse off if they make the wrong choice after shake-up”.
About 250,000 families who use government vouchers to help pay for childcare could be worse off under a scheme to be launched this autumn. But many will find it difficult to work out which is the best option for their family – and they could lose up to £1,300 a year if they make the wrong decision.
Parents, many exhausted by the trials of working while raising a very young family are going to have to decide: should they stay in the current voucher scheme or switch to the new regime? Parents have been urged to at least register for the existiing scheme immediately (childcare vouchers) so they have the option to use it. If they don’t register, they will have no choice but to sign up to the new scheme. More details will be outlined in the budget next month.
Under the new scheme, which will be available to households with a combined income of up to £300,000 parents can claim a maximum of £2,000 a year per child. About 54,000 parents currently use childcare vouchers. They will be able to stick with this benefit or they can choose to swap to the new scheme. Once they switch however, there will be no going back – even if they are worse off.
Money (Sunday Times) has uncovered Treasury documents that estimate about 1 million families will be better off, mainly those who canot use the current system – if they are self-employed or their employer hasn’t yet offered childcare vouchers. BUT the Treasury implies that 250,000 families could be worse off if they leave the current system.
Those worst affected would lose about £1,283 a year in government hand-outs.