Tory childcare plans could see families of over-fives lose £18,000 worth of help

More than 100,000 families could lose out on up to £18,000-worth of childcare help under a new government scheme announced today.

More than 100,000 families could lose out on up to £18,000-worth of childcare help under a new government scheme announced today.

Under the government’s new tax free childcare plans, families who currently receive childcare vouchers from their employers will not be able to transfer over to the new coalition scheme – expected to begin in Autumn 2015 for children born after September 2010.

In addition, 1.2 million families with children over five could miss out on any help at all under the plans.

The new scheme will be introduced from Autumn 2015 and will mean that families earning up to £298,000 will be eligible for £1,200 childcare help per child.

But figures from the House of Commons Library show that these families could lose out on £18,000 when the new policy comes in if both parents are in receipt of vouchers and they move jobs. If one parent receives vouchers and moves job they could lose £9,000.

Under the current system more than 100,000 families receive Employer Supported Childcare vouchers because the employer-based scheme is available for individual parents with children up to the age of 16.

Under new plans, however, families with a child born before September 2010 could lose out as the scheme will initially cover only under-fives. This, despite the fact that childcare costs for families of children aged 5-11 picked up after school by a childminder are on average £2,470 per year.

Commenting on the government’s plans, Labour shadow minister for childcare and children Lucy Powell MP said that whilst she welcomed any extra support with childcare costs, many families, especially with children born before September 2010, would “not only not benefit from this scheme but will actually lose out on current support”.

“Families with children born before September 2010 will not benefit from this scheme and are in danger of losing their current entitlement,” she added.

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