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Childcare Vouchers Andrew Collings – Director; Accor Services UK

Childcare Vouchers Andrew Collings – Director; Accor Services UK. Childcare Vouchers in the UK. Background How does it work in the UK? Who benefits? Key data Questions. Background. There are approximately 27.4 million parents in the UK.

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Childcare Vouchers Andrew Collings – Director; Accor Services UK

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  1. Childcare Vouchers • Andrew Collings – Director; Accor Services UK

  2. Childcare Vouchers in the UK • Background • How does it work in the UK? • Who benefits? • Key data • Questions

  3. Background • There are approximately 27.4 million parents in the UK. • More than one million parents in the UK feel they are prevented from working or looking for work ‘due to their children’. • Parents pay an average amount of £40 per week for childcare for each of their children, amounting to annual costs of £2,080 per child.

  4. Government support offered • Prior to 2005 Employers could offer employees support for Childcare costs and save on National Insurance costs • In 2005 the government introduces option for parents to exchange (sacrifice) part of their salary in exchange for Childcare Vouchers (for age 0 - 16) • 2005 Maximum amount to exchange (sacrifice) is £217 per month • 2007 Maximum amount to exchange (sacrifice) is increased to £243 per month • Employee pays no tax (based on rate of tax) on the amount they exchange (sacrifice) • The Employer does not pay National Insurance on the amount the employee exchanges (sacrifices) • Vouchers must be used only at “registered and approved” childcare providers • From 2011, under the Government’s proposed reforms, higher-rate taxpayers are only able to claim tax relief at the basic rate. 4

  5. How does it work ………. Payment from sacrificed salaries Carer Management Voucher Provider Credit Child Carer Employer Employee Reimbursement

  6. How does it work ………. Carer

  7. Who benefits Government sees increase in working parents Carer benefits from increased use of nurseries and care facilities

  8. Key data • The analysis of who actually uses childcare vouchers in the UK suggests that: • Around 190,000 people were using childcare vouchers in 2007, today over 250,000 people are using childcare vouchers, with over 35,000 employers running schemes for their employees • The vast majority of voucher users are on middle incomes, with around 83% of users paying income tax at the basic rate • Voucher users are diverse in terms of family structure, gender, geographic location and ethnicity. • In excess of £900m issued in Childcare Vouchers per year • The current scheme “costs” the Government around £240m in 2007

  9. Vouchers provide part of a patchwork of childcare support available to working parents, becoming increasingly important for families earning between £20,000 and £30,000

  10. Childcare vouchers appear to be used more intensively by working lone parents than by couples.

  11. All occupational and socio-economic groups are well-represented among voucher users, with manual and unskilled workers being the best represented group. • Voucher users are diverse in terms of family structure, gender, geographic location and ethnicity.

  12. Childcare vouchers in the UK Child Parents / Employee Employer Carer Government Improving support for working families 12

  13. Gracias 13

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