Campaign to raise cap on childcare vouchers ramps up

Another leading childcare voucher provider has joined a campaign to give parents more support towards childcare costs.

Another leading childcare voucher provider has joined a campaign to give parents more support towards childcare costs.

KiddiVouchers has teamed up with Busy Bees on the Mind the Gap – Raise the Cap campaign. The campaign calls on the Government to raise the limits of the childcare voucher scheme. Basic-rate taxpayers currently receive a tax break on up to £55 a week (£243 a month) of childcare vouchers, but this £55 limit has remained fixed since 2006, despite childcare costs rising faster than wages.

KiddiVouchers and Busy Bees are suggesting that the Government should raise the threshold to £75 a week, to reflect the increase in childcare costs. They claim that this simple change would be the most cost-effective and targeted way of supporting working families.

Alison Chalmers, Director at KiddiVouchers, says: Childcare vouchers provide a powerful economic stimulus, by encouraging parents to return to work, by helping to fund high quality early education and by assisting employers who are striving to be family-friendly. Childcare vouchers are more accurately targeted than other types of support for working parents and the scheme fits well with the Government’s ‘austerity plus growth’ agenda.”

John Woodward, Director of Busy Bees Benefits and originator of the Mind the Gap campaign, adds: There is always a healthy competition between childcare voucher providers, but supporting the interests of working parents is actually the reason we are in business.”

Childcare vouchers are available to any employed parent, providing their employer is willing to opt in to the scheme. Parents typically receive childcare vouchers instead of part of their salary, which leads to tax and National Insurance savings of up to £933 a year.

KiddiVouchers says one of the advantages of vouchers is that, unlike childcare tax credits, they are carefully controlled, which ensures that they can only be spent on regulated childcare (including nurseries, pre-schools, childminders, nannies and out-of-school care).

It adds that, unlike the free nursery places scheme, which provides part-time early education for three and four year olds, childcare vouchers don’t have a negative impact on the earning potential of childcare providers.

KiddiVouchers also claims that vouchers promote quality care by allowing childcare providers to charge viable fees and parental choice, giving parents the option to use many different types of childcare.

Employers also save money with childcare vouchers. They can save up to £402 a year in National Insurance for each parent who opts for childcare vouchers, says KiddiVouchers.
*Parents, employers and childcare providers are invited to lend their support to the campaign, by signing a petition at The campaign aims to achieve 100,000 signatures, to make the issue eligible for debate in the House of Commons and potentially leading to an increase in the childcare voucher limits in the 2013 Budget.

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