Childcare Changes 2015
Childcare Changes 2015 Poster (737 kb)
Childcare 2015 Employee FAQ's (112 kb)
What is the new Tax-Free Childcare scheme being introduced by the Government?
The new Tax-Free Childcare scheme would allow working parents (where both parents are working) to claim up to £2,000 per child towards the cost of childcare. They will receive 20% – equivalent to the basic rate of tax – of their yearly childcare costs up to £10,000 per child. The scheme will be open to families where both parents work and earn up to £300,000 between them, or single parents earning less than £150,000.
Couples where one parent doesn't work will be excluded from the TFC scheme but will be eligible to make savings in the current scheme.
What you should know:
1. Is Tax-Free Childcare right for you?
- Tax-Free Childcare provides a 20p per pound cash back on childcare costs, so for example, if you and your partner are both basic rate taxpayers with one child, you would have to be spending at least £9,330 on childcare per year to receive the same amount of support as the current scheme offers.
- Unlike the current scheme where both parents can apply complications will arise if parents are separated - under the new rules, only one parent can claim. The Government states that they will decide who gets the money in cases where parents cannot agree.
- You can only claim Tax-Free Childcare for children under 12
2. Are you eligible for Tax-Free Childcare?
- If you receive Child Tax Credits, you will have to opt out of this benefit in order to be eligible for Tax-Free Childcare. For many, this would result in a loss of £545 a year on top of the childcare voucher savings currently made.
- Both you and your partner must be working to claim Tax-Free Childcare. On the existing childcareplus scheme only one of you has to be working.
3. What would you need to do to qualify?
- You will need to confirm your eligibility for Tax-Free Childcareevery quarter and manage payments in and out of your online account each month (before the government’s 20% is added).
- Your employer will no longer have any involvement in managing the vouchers on your behalf and this responsibility will fall completely on your shoulders.
Don’t know which scheme will be best for you?
| childcareplus & kidsclubplus Vouchers||Tax-Free Childcare|
|Save up to £933 per parent (£1,866 per family)
||Save 20% of childcare costs
|For every £100 spent on childcare you could save £32 / 32%*
||For every £100 spent on childcare you could save £20 / 20%
|Available for children up to the age of 15***
||Available for children up to the age of 12
|Both parents can claim despite relationship status
||Only one parent can claim if divorced or separated
|It doesn’t matter if only one parent is working
||Both parents must be working
|Employer manages scheme on parents behalf
||Parent must manage everything themselves
How does it affect me?
As long as parents join before autumn 2015, they will still have the option available to remain on the existing scheme (Childcare Plus). If it would not be financially worthwhile for them to join the new scheme, or if they become ineligible. The existing scheme is open to new joiners up to the introduction of this new Government Scheme.
At this point, under the new legislation, the existing scheme will be closed to new joiners but existing members will continue to be able to benefit if they would not be eligible for the new scheme or choose not to participate in the new scheme.
If you think the new Tax-Free Childcare scheme does not suit your personal circumstance, then you can continue using childcareplus. You can still receive vouchers after this autumn’s changeover, unless you change employers. Even if you move employer once the new scheme is in place, your childcare vouchers will not expire. To find out more about childcareplus & kidsclubplus and apply, please use the DMU Rewards portal by clicking here.
We will continue to update this site and send you further information in partnership with our Partner Organisation, P&MM as we approach the changes in 2015.
For more information, please see the employee FAQs.
Want to find out more?
Contact your HR department for details on how to apply or...
Call: 0800 161 3042 from a landline or 01908 303 502 from a mobile**
Text: childcare to 81025**