Childcare voucher changes – how will they affect you?‪‪

By Computershare Voucher Services managing director Julian Foster.

‪On 19th March 2013, the Government announced an overhaul of the childcare voucher scheme.‪


The new scheme will not come into force until autumn 2015 at the earliest, but it does represent a big change in the way that Government supports childcare in the UK.‪

You will want to know what has been announced. You will want to know how it affects you, and how our service will change.‪

The first thing to say is many of the details have yet to be decided and we are engaging with Government in a consultation which will take up much of the year.‪

What we know will happen is that childcare vouchers will go from being a salary sacrifice benefit offered by employers to their staff (as it is now) to a benefit offered by Government to working parents.‪

It will be open to a single working parent earning up to £150,000 per year, or two working parents with combined earnings of up to £300,000. For the first time the self-employed will also be included.

That all means the number of families able to use childcare vouchers will go from the 500,000 registered to use them at the moment to something in the region of 2.5million in 2015.  

We welcome that, and we welcome the £750m in new money for childcare that this deal represents.

Will you be better off under the new scheme?‪‪

That’s the key question. Not everyone will be.‪

We’re busy creating an online calculator to help you discover exactly whether you’ll be better or worse off. Information is already out there, but it does mean doing a bit of maths – not everyone’s favourite pastime! You can find Government advice here.‪

We’ll upload our calculator as soon as we have it. Keep checking here, follow our Twitter account and like our Facebook page for updates.‪

However, in general terms, a single parent paying tax at basic rate and spending over £4,665 on childcare each year will be better off in the new scheme.

For a family with two or more children, where both parents are working (and paying tax at basic rate), if they spend over £9,330 on childcare each year, they will be better off in the new scheme.

The existing scheme generally works out better for two parent families with only one child or parents spending less than the above examples.

The good news is that if you are better off under the system which exists now you will not be forced to change to the new system. That really is worth remembering.‪

Currently, only parents with children aged under five are eligible for vouchers in the first year of the new scheme, but that is expected to increase to all with children under 12 over time.

The existing scheme covers all children aged 15 or under.‪

What will happen to my childcare vouchers?‪‪

If you don’t want anything to happen to your childcare vouchers – nothing.

If you want to adopt the new system, it won’t be in place until autumn 2015 at the earliest. So there is no need to do anything, or make any decisions, for quite some time.‪

In the meantime you can continue to receive and use your childcare vouchers in exactly the same way as you do now.

We will also be designing a process for easily moving across to the new system, if that’s what you want when the time comes.‪

So, for now, it’s business as usual!

We’ll keep you updated with the results of the consultation.‪