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| Working parents to be given up to £1,200 a year in childcare support | Working parents to be given up to £1,200 a year in childcare support |
| (about 1 month later) | |
| Parents on joint incomes of up to £300,000 will be eligible for tax-free childcare support worth £1,200 a year under a new scheme that will be one of the central measures in Wednesday's budget. | Parents on joint incomes of up to £300,000 will be eligible for tax-free childcare support worth £1,200 a year under a new scheme that will be one of the central measures in Wednesday's budget. |
| Under the plan parents will be eligible to receive 20% of their yearly childcare costs, up to £6,000 a year. Nick Clegg hailed what the prime minister, David Cameron, called "a boost direct to the pockets of hardworking families". | Under the plan parents will be eligible to receive 20% of their yearly childcare costs, up to £6,000 a year. Nick Clegg hailed what the prime minister, David Cameron, called "a boost direct to the pockets of hardworking families". |
| But the Resolution Foundation thinktank criticised the government for helping richer parents while failing to recognise the barriers faced by poorer families. | But the Resolution Foundation thinktank criticised the government for helping richer parents while failing to recognise the barriers faced by poorer families. |
| Speaking on BBC Radio 4's Today programme, childcare minister Elizabeth Truss said the government was supporting low-income families by ploughing £200m in additional income into the forthcoming universal credit system. | Speaking on BBC Radio 4's Today programme, childcare minister Elizabeth Truss said the government was supporting low-income families by ploughing £200m in additional income into the forthcoming universal credit system. |
| However, Truss said that 2.5 million middle-income families also needed help. "What we are recognising is that there are families that are earning between £20,000 and £40,000 where it simply isn't worth their while going out to work at the moment because of the really expensive costs of childcare. And we want to help those families who work hard and want to get on." | However, Truss said that 2.5 million middle-income families also needed help. "What we are recognising is that there are families that are earning between £20,000 and £40,000 where it simply isn't worth their while going out to work at the moment because of the really expensive costs of childcare. And we want to help those families who work hard and want to get on." |
| The £750m scheme – which will be introduced in the autumn of 2015, after the next election – will initially apply to children under the age of five, providing help to 1.3 million families. It will eventually be extended to include children up to the age of 12. | The £750m scheme – which will be introduced in the autumn of 2015, after the next election – will initially apply to children under the age of five, providing help to 1.3 million families. It will eventually be extended to include children up to the age of 12. |
| Both parents will have to be in work, with neither earning more than £150,000, to qualify. The Treasury confirmed that two parents with a joint income of £299,999.98 would be eligible. | Both parents will have to be in work, with neither earning more than £150,000, to qualify. The Treasury confirmed that two parents with a joint income of £299,999.98 would be eligible. |
| Truss said only 8% of women earn more than £40,000 but admitted the childcare tax rebate had been capped at £150,000 for a single earner for the sake of simplicity. | Truss said only 8% of women earn more than £40,000 but admitted the childcare tax rebate had been capped at £150,000 for a single earner for the sake of simplicity. |
| "This voucher system is much better than its predecessor because every working family can access it – 2.5 million people can get it rather than the 500,000 at the moment. At the moment it is luck of the draw [because many employers do not make use of the scheme]. It's difficult for middle earners and it is right that they receive that support," the minister said. | "This voucher system is much better than its predecessor because every working family can access it – 2.5 million people can get it rather than the 500,000 at the moment. At the moment it is luck of the draw [because many employers do not make use of the scheme]. It's difficult for middle earners and it is right that they receive that support," the minister said. |
| When asked why the government was not directly incentivising parents to stay at home with their children, Truss said: "We believe in marriage, we believe in strong families, but we believe in families making choices about how they look after their children … It's not a black and white choice." | When asked why the government was not directly incentivising parents to stay at home with their children, Truss said: "We believe in marriage, we believe in strong families, but we believe in families making choices about how they look after their children … It's not a black and white choice." |
| Clegg said: "The rising cost of childcare is one of the biggest challenges parents face and it means many mums and dads simply can't afford to work. This not only hurts them financially, but is bad for the economy too. This announcement of a £1bn investment in childcare will make sure it pays to work. | Clegg said: "The rising cost of childcare is one of the biggest challenges parents face and it means many mums and dads simply can't afford to work. This not only hurts them financially, but is bad for the economy too. This announcement of a £1bn investment in childcare will make sure it pays to work. |
| "An extra £1,200 for each child will make a real difference to families who find themselves constantly worrying about how to juggle their family budget. And extending support for working families on Universal Credit will make sure it is worth working extra hours even if you're on low wages." | "An extra £1,200 for each child will make a real difference to families who find themselves constantly worrying about how to juggle their family budget. And extending support for working families on Universal Credit will make sure it is worth working extra hours even if you're on low wages." |
| The £750m costs of the scheme will be funded by new money from the budget and by phasing out the Employer Supported Childcare (ESC), claimed by 450,000 families, which is offered by just 5% of employers. Parents who claim ESC will be able to remain in the scheme, though this will not be open to new claimants after the launch of the new scheme, which will be more generous for parents with more than one child. | The £750m costs of the scheme will be funded by new money from the budget and by phasing out the Employer Supported Childcare (ESC), claimed by 450,000 families, which is offered by just 5% of employers. Parents who claim ESC will be able to remain in the scheme, though this will not be open to new claimants after the launch of the new scheme, which will be more generous for parents with more than one child. |
| A source said the government already offered a great deal of support to lower-income families as it continued a Labour scheme to offer 15 hours of free universal childcare to all three- and four-year-olds. This will be extended this year to all two-year-olds whose parents are from the 20% most disadvantaged families, later rising to 40%. | A source said the government already offered a great deal of support to lower-income families as it continued a Labour scheme to offer 15 hours of free universal childcare to all three- and four-year-olds. This will be extended this year to all two-year-olds whose parents are from the 20% most disadvantaged families, later rising to 40%. |
| Gavin Kelly, chief executive of the Resolution Foundation, said that overall most of the extra support will go to parents in the top half of the income distribution. He said: "It is absolutely right that the government is making childcare more affordable for families – it is a massive burden for millions of households. However, spending large sums on tax relief that tends to benefit higher-income families does not recognise that low- and modest-income families face the highest barriers to work from childcare costs." | Gavin Kelly, chief executive of the Resolution Foundation, said that overall most of the extra support will go to parents in the top half of the income distribution. He said: "It is absolutely right that the government is making childcare more affordable for families – it is a massive burden for millions of households. However, spending large sums on tax relief that tends to benefit higher-income families does not recognise that low- and modest-income families face the highest barriers to work from childcare costs." |
| Kelly raised concerns that families who receive support through tax credits and the universal credit, which will be introduced in stages from next month until 2017, will not be eligible. He said: "It is vital that the government revises universal credit to ensure that low-income working families, including the large number who work part time on low pay, have an incentive to earn more." Kelly acknowledged that a further £200m will be provided to less affluent parents claiming universal credit, though greater help will be provided to those in work. | Kelly raised concerns that families who receive support through tax credits and the universal credit, which will be introduced in stages from next month until 2017, will not be eligible. He said: "It is vital that the government revises universal credit to ensure that low-income working families, including the large number who work part time on low pay, have an incentive to earn more." Kelly acknowledged that a further £200m will be provided to less affluent parents claiming universal credit, though greater help will be provided to those in work. |
| The government will meet 85% of the costs of childcare for parents on universal credit, provided that both parents are working and that they earn more than the personal tax allowance, which is due to reach £10,000 by 2015. Parents on universal credit who fail to earn this amount will be eligible for only 70% of the costs of childcare, the current amount on offer. | The government will meet 85% of the costs of childcare for parents on universal credit, provided that both parents are working and that they earn more than the personal tax allowance, which is due to reach £10,000 by 2015. Parents on universal credit who fail to earn this amount will be eligible for only 70% of the costs of childcare, the current amount on offer. |
| Stephen Twigg, the shadow education secretary, said: "Today's announcement will not make up for the £1,500 that families have lost in cuts to childcare support. Those who have seen their incomes cut because tax credits have been cut will not get any help. That is deeply unfair. | Stephen Twigg, the shadow education secretary, said: "Today's announcement will not make up for the £1,500 that families have lost in cuts to childcare support. Those who have seen their incomes cut because tax credits have been cut will not get any help. That is deeply unfair. |
| "Parents will be disappointed that three years into this government, they will not get any help with childcare costs for another two and a half years. While working parents are promised help tomorrow, this government is only helping millionaires today." | "Parents will be disappointed that three years into this government, they will not get any help with childcare costs for another two and a half years. While working parents are promised help tomorrow, this government is only helping millionaires today." |
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