By Mark Smulian | 6 August 2013
Working families with a child under 12 could save up to £1,200 per year under the tax-free childcare scheme, Chancellor George Osborne has said.
Launching a consultation on its operation yesterday, he said: ‘Tax-free childcare will help working parents by giving them more choice and better access to the quality, affordable childcare they need.’
Under the proposals, the scheme would cover 20% of childcare costs up to a limit of £6,000 per year per child, equivalent to a total maximum per child of £1,200.
Those eligible would be single parents in work and families with two working parents, but only if individuals earn less than £150,000 per year.
People already receiving support through tax credits, or Universal Credit in future, will not eligible, and nor will those on the Employer Supported Childcare scheme.
The scheme is intended to start in autumn 2015, covering children aged five and younger.
Eligibility will increase annually until children aged under 12 are included, with support ending in the September following the child’s eleventh birthday.
Although the scheme is for working parents, those on paid maternity, paternity and adoption leave will be eligible, as will be recipients of Carers’ Allowance.
It will be delivered through online accounts run by private sector voucher providers.
‘The government wants parents to have a choice of voucher providers and for them to be able to switch between them with minimal fuss and cost,’ the consultation stated.
The consultation also covers the detail of the £200m of additional childcare support available from April 2016 for working families who receive Universal Credit. It closes on October 14.
