Working parents to get £1,200 a year towards childcare expenses

 
Tim Wallace
Follow Tim
THE GOVERNMENT will commit to increase support for working parents today with a new voucher scheme offering up to £1bn per year in tax relief on childcare.

Households where both parents work but earn less than £150,000 each per year will be able to claim up to £1,200 per child per year, as long as they use approved providers.

Households with one parent working will not receive support, in a change to current rules.

The plan envisages a new website where parents buy vouchers. For every 80p they contribute, the government will add in 20p, up to the cap.

Vouchers can be used to subsidise up to 20 per cent of childcare costs on a per-child basis.

The scheme is set to open in 2015 for those with children under five, then be rolled out to those under 12 over the following years.

It is expected to cost £750m, plus an additional £200m for those with universal credit, and will partly be funded by the withdrawal of the existing childcare voucher system.

Chancellor George Osborne is expected to reveal the full details in tomorrow’s Budget.

The government is believed to be frustrated that so many parents – and mothers in particular – stay at home instead of working, and wants to encourage them to re-join the workforce.

“If Britain is going to succeed in the global race we must help those who work hard and want to get on,” David Cameron will say.

But Labour said the support is too slow.

“While working parents won’t get any help before the next election, David Cameron is happy to help millionaires with a tax cut now,” said shadow education secretary Stephen Twigg MP.