Childcare Voucher Legislation Changes

The proposed scheme will allow parents to buy vouchers online to pay for childcare, the Government will add 20p for every 80p that the parent puts in, up to a limit of £10,000. If a parent claims £10,000, he or she will pay £8,000 and receive a £2,000 government subsidy.

Childcare Vouchers on the new scheme will be available to pay for childcare for children up to 12 years old, however the age restriction will be phased in over the first year: at launch only under-5s will qualify but by the end of the year it will apply to all under-12s.

The scheme will work in quarterly entitlement periods – once eligible, parents will continue to be entitled to support for three months, regardless of any changes in circumstances.

Both parents in the household must be working in order to qualify for the scheme, in single-parent families the single parent must have a job. Anyone working at least eight hours a week on the minimum wage, or earning around £50 per week will be considered as eligible. The scheme will now be open to the self-employed as well as employees.

Those paying additional rate tax (for 2014-15 the additional rate of 45% applies on income above £150,000) or parents who receive support through tax credits or the universal credit will not qualify for the scheme.

How will the new scheme affect my existing Childcare Voucher scheme?

All working parents in receipt of Childcare Vouchers from their employers’ scheme before the introduction of the new scheme will continue to receive these vouchers with the same financial benefits.  After Autumn 2015 the scheme will be frozen to new entrants.

Would I benefit staying in the existing scheme or joining before the Autumn 2015 cut off?

Depending on your circumstances you could be better off in the existing employer supported scheme. For instance if you:

  • are claiming vouchers for children between the ages of 13 – 15
  • are earning in excess of £150,000 per annum or
  • have only one parent in the family working

you may want to consider enrolling or remaining in the current scheme.

To find out more please go to our Childcare Vouchers page  or contact us on 01223 720209 or email

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