How the child care voucher scheme benefits parents

One of the results of the government's pledge to reduce child poverty during their period in office is the new child care voucher scheme. The aim is to encourage as many parents to return to work, either full-time or part-time, as possible. In the past, the prohibitive cost of child care has made it difficult for some parents, particularly those on lower wages, to financially justify the return to work.

The child care voucher scheme has been introduced to combat this problem. Participating employers can offer child care vouchers to their employees, as part of a salary sacrifice scheme. Employees are allowed to take up to £55 per week or £243.00 per month out of their gross salary as child care vouchers, thereby saving tax and National Insurance on these particular child care contributions.

The voucher scheme is administrated by a third party, and employees enter into a contract with the employer, who then forwards information about the participants to the administrators. The appropriate vouchers are allocated to the employee's voucher account with the third party administrator. The employee can then allocate them as part or full payment of their child care costs, and the child care provider simply receives the monetary value into their bank account.

There are several benefits to parents:

Both parents can claim child care vouchers to the maximum limit, if they are both employed.

The maximum savings are £962 per parent for 22% tax payers and £1195 for 40% tax payers.

Child care becomes more affordable.

Vouchers can be used for a wide range of child care, including after-school clubs and child minders.

The greater the number of child care providers that accept vouchers, the greater the choice for parents.

An employer operating a child care voucher scheme must offer it to all employees across the company, not keep it for selected staff. This allows the parents who need the vouchers most to be able to access them to help keep their child care affordable.

At Fennies under 5's Day Nurseries, we accept child care vouchers at our nurseries, and we can also administer a child care voucher system for your company through Fennies Vouchers.

For more information,
please call us on 020 8763 8039 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Date: 08/12/2005