The system of Childcare Vouchers was introduced so that there was a mechanism in place to ensure that the money generated through the scheme, was being directed correctly to the childcarers.
Why has the government introduced child care vouchers?
Only 20 years ago, child care was very scarce, and employers were inflexible when it came to adjusting working hours for parents, or providing alternative working environments. Today's employers have realised that in order to retain the staff they have invested time and money in over the years, and to attract the best new employees, they need to create an attractive incentives programme. Corporate incentives can include anything from gym membership to free parking, and have increasingly involved some form of help with child care.
This government has decided to make child care provision a priority, and so introduced a tax-efficient child care voucher system in April 2005. Since it came to power in 1997, it has made reducing child poverty a key part of its policy-making. Improving the quality of life for the UK's children has involved encouraging single parents and poorer parents into work. The cost of good child care has long been a barrier to these groups in society, and so the government has been trying to find ways to encourage people to work, whilst making child care schemes attractive to employers as well as parents.
The most recent scheme, where a proportion of pre-tax salary can be exchanged for government child care vouchers, hopes to please parents, employers and carers, allowing parents to work, employers to save money on their National Insurance contributions and carers to receive payment from parents via vouchers without incurring any additional charges. Made available to both parents or guardians of a qualifying child, it allows them to exchange up to £55 each per week, or £243.00 each per month to help with child care costs.
Employees on a low income who want to take advantage of the child care voucher scheme need to be working for an employer who offers the scheme, and should speak to their HR department to ensure that by swapping salary for vouchers, they are still eligible for the other credits and tax benefits that are available to them.
At Fennies, we run the government child care voucher scheme at our nurseries and administrate voucher schemes for employers and parents. For more information on the child care voucher scheme, to see if you are eligible, or to enquire about setting up a scheme, read the other articles on our site, or email us at
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Date: 08/12/2005
The introduction of childcare vouchers provides a genuine cash saving for working parents, and Fennies Vouchers would like to ensure that the experience of using childcare vouchers is quick and simple, and does not add an unnecessary administrative burden to the already busy lives of the working family.
