What is a government child care voucher?

In April 2005, a new government child care voucher system was introduced, allowing employers to provide child care vouchers as part of their programme of incentives. A participating employer can offer the vouchers to members of staff through a “salary sacrifice” scheme, where the employee agrees to take a certain amount of their salary in the form of childcare vouchers. This exchange of vouchers for salary takes place before tax and National Insurance deductions, which makes them more beneficial to both the parent and the employer.

Once the parent has received the child care vouchers, which is usually in line with their regular salary payment, whether it be weekly, fortnightly or monthly, they can use them to pay their child care provider. The child care provider redeems the vouchers and the money is paid straight into their bank account.

The benefits of using the child care voucher system apply to all the parties involved:

The Employer

The employer provides to scheme to help attract and retain staff, but the administration is outsourced to the voucher provider. The employer saves money on National Insurance contributions because the exchange of salary for vouchers takes place before any deductions on the salary.

The Parents

Parents and legal guardians benefit from the vouchers because they are exchanged on gross salary. In addition, both parents or guardians can claim up to the maximum value each week or month, doubling the savings available, as long as both are working, and not self-employed. This help with payments allows them to maintain their working life without compromising the child care services they choose. The vouchers are redeemable for a wide variety of registered child care, allowing parents to benefit no matter what stage their child is at.

The Carer

The carer is paid in vouchers which are instantly redeemable through the voucher administrator. There is no cost at all to the carer, and they may be able to increase their business by being part of the child care voucher system.

At Fennies, we offer a voucher administration system that makes it easy for employers, parents and carers alike to benefit from the new government child care voucher system. Years of experience in childcare mean that we are ideally placed to help you set-up, register and take part in the scheme.

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