Published by: Olivia Brown
18th March 2014
It has been announced ahead of tomorrow’s Budget announcement, that the childcare subsidy for working parents is to be increased. As many as 1.9 million working families will benefit from the subsidy, worth up to £2,000 per child up to 12 years of age, from September when the scheme will come into effect.
David Cameron has pledged to help ‘all families, but particularly those families that do feel their finances are squeezed’ through the increased subsidy. The Family Childcare Trust revealed the average cost for 25 hours of care for a child under the age of two is £109.89, which for some parents means spending their whole wage on childcare. Currently, costs can be reduced if parents are employed by companies enrolled in the tax-free voucher scheme, however, only 5% of UK employers and 450,000 families are signed up to the scheme, not even half of the families who will benefit from the increase subsidy.
So, how will it work?
Parents will have to set up an online account, allowing them to collect a 20% rebate, per child, on the annual cost of childcare up to 10,000. The parents working part-time, earning more than £50 per week, parents on maternity, paternity and adoption leave, as well as entrepreneurs starting their own business will all qualify.
The BBC interviewed parents at a nursery in Manchester, who shared their views on the revised plans. One mother explained how her childcare costs are more expensive than her mortgage, with another parent explaining the dilemma of working more hours against the huge childcare costs that longer working hours requires.
Although the scheme will only benefit families with two working parents, not those with a stay-at-home parent, the increased subsidy will no doubt make a huge difference to families that are feeling the financial squeeze. The Government are working towards family friendly policies, finally recognising and rewarding hard working parents.