Voucher schemes for childcare come to an end

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Data from the Office for National Statistics (ONS) showed that 74% of women with dependent children are now employed, increasing difficulties with childcare. This is the highest level since records began. The period between April and June 2018 shows an increase from 68.9% in 2013 and 61.9% in 1996 which is when records began. Additionally, the number of employed men with dependent children had also increased to a record high of 93.1% which was an increase of 3.1% since 2013.


This release of statistics from ONS coincided with a shake-up to key employee benefits that are aimed at working parents. Childcare voucher schemes, which allow staff members to sacrifice some of their salary in return for subsidised childcare costs, have been closed off to new entrants as of 4th October 2018. The parents that are already enrolled onto the programs will be able to continue to use and receive the benefit, however, if the parent decides to leave their current employer they will not be able to re-enter the scheme in another place of work.


The childcare voucher schemes have been replaced by tax-free childcare. This is run through HM Revenue and Customs (HMRC). This new action means that childcare will no longer be taxed, therefore reducing the cost for parents. The two childcare schemes differ in how they operate, with cautions that some employees would be financially worse off if they stopped using vouchers in favor of the new scheme. In a recent survey conducted by People Management, they discovered that 90% of the magazine’s readers were an employee for an organization which chose to run a childcare voucher scheme.


Board member of the Childcare Voucher Providers Association, Julie Barker, stated that “it’s a real shame that the government has moved ahead with the plans to close the childcare voucher scheme to new entrants from today”.


Statistics that ONS released found that a large proportion of working mothers are in part-time roles. Approximately half (49.6 per cent) of working mothers worked fewer than 30 hours in their main job, excluding overtime. Yvonne Gallagher, employment partner at Harbottle and Lewis, stated that “flexible work offerings have improved steadily, and new initiatives such as gender pay gap reporting – and to some extent, shared parental leave – have helped shine a light on the issues faced by working mothers”.


Earlier this week, the government announced that it was dwelling on introducing two policies in order to help parents in the workforce – imposing a duty on employers to take into account whether a job could be done flexibly, and reflecting this in their advertising, and requiring organisations with 250 or more staff to disclose their parental pay and leave policies.


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