I am delighted that Conservatives in Government announced last week that they will be introducing a Tax-Free Childcare scheme for working families.
This scheme will provide much needed support for those in work facing high childcare costs, while enabling others to either move into work, or increase their hours in work, where they wish to do so.
Support will be extended to up to 2.5 million working families, providing them with 20 per cent of their childcare costs – equivalent to the basic rate of Income Tax – worth up to £1,200 for each child. This will ultimately be available for all children under 12.
For a family with two children, this could be worth more than double the amount of a single claim under the existing scheme, and will be open to around five times as many families. Once fully in place, this will mean that support for childcare covers all working families (except when one parent earns over £150,000) for the first time.
The Government is currently consulting on the proposals until 14 October 2013 and so I would urge local residents to show their support at: www.gov.uk/government/consultations/tax-free-childcare
The consultation seeks views on a wide range of questions on how Tax-Free Childcare will operate, including around scheme eligibility, the voucher payment system and government ‘top-ups’, and the role of employers and other organisations. The document also provides more detail on certain issues. For example:
· parents will be able to set up voucher accounts online, and make payments into the accounts which the Government will ‘top up’;
· those on paid maternity, paternity and adoption leave will be eligible to continue receiving Tax-Free Childcare for any existing children; and
· couples in which one parent works, and the other is in receipt of contributory Employment and Support Allowance or Carer’s Allowance will also be eligible for Tax-Free Childcare.
The new Tax-Free Childcare scheme to expand support for affordable childcare to 2.5 million families comes as part of this Government’s overall strategy aimed at ensuring that work pays. This measure comes in addition to the introduction of universal credit, making the benefits of work clearer and the transition into work smoother, and the raising of the personal allowance to £10,000 from April 2014, providing a tax cut for an estimated 45,054 people in Crawley and lifting a further estimated 4,303 out of paying income tax altogether.
More broadly, the Government has also announced that this year the pupil premium will be worth £900 per pupil. This means that in Crawley just over 3,000 children overall will benefit from this £3 million funding.
Henry Smith MP