How do childcare vouchers work, who is eligible, how do you claim them and how much money can you save?
CHILDCARE can be an expensive business and parents often worry about the cost of paying for their kids to be looked after while they work.
Here is everything you need to know about the childcare vouchers scheme which is available to most mums and dads.
What is the childcare vouchers scheme?
The childcare vouchers scheme is a government-run and tax-free way of paying for your childcare costs.
It allows employees to exchange part of their gross salary for vouchers, meaning it is tax-free and exempt from national insurance contributions.
Most employers, both big and small, run a childcare vouchers scheme for their employees who are parents.
All registered childcare providers should accept the vouchers and these include nurseries, nannies, childminders, after-school clubs, creches and holiday play schemes.
Who can claim childcare vouchers?
Most working parents with a child under the age of 15 are eligible to claim childcare vouchers.
To claim them, contact your HR or personnel department and ask them how you can join the scheme.
However, not all employers can offer the scheme and self-employed parents are not eligible to claim the vouchers.
Most vouchers come with an expiry date, which means that they have to be used in time.
A new childcare scheme was rolled out in September 2017, with working parents able to apply for 30 hours of nursery childcare for their three and four-year-old children.
It comes as research revealed grandparents are the UK's number one supplier of childcare.
How much can I save with childcare vouchers?
You can save huge amounts of money claiming childcare vouchers from your employers.
This is because they are taken from your salary before it has been subject to tax and national insurance.
The amount of cash you can exchange is limited to £243 a month or £55 a week per parent. This means two working parents could claim a total of £486-worth of vouchers each month.
The vouchers are capped at that amount meaning you cannot claim any more vouchers if you have more than one child.
For people on the basic rate of tax, the savings can add up to £933 a year per parent.
Higher rate taxpayers can save £625 a year and additional rate taxpayers save £623 a year.
Childcare voucher changes delayed
The government has agreed to a six-month extension of the childcare voucher system used by up to 450,000 parents.
The system was due to be closed to new entrants in favour of a new government scheme called tax-free childcare alternative.
The new scheme was meant to give working parents 20 per cent off the cost of childcare providing they were earning at least £120 a week.
But since it was launched in April it has been beset with problems and complaints.
Critics have also said it would leave thousands of people actually worse off.
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Education Secretary Damian Hinds suspended the closure during a Commons debate, after an intervention by the DUP MP Emma Pengelly.
Hinds said: “I have heard the concerns raised about this, and about the timing, and I can confirm we will be able to keep the voucher scheme open for a further six months to new entrants following representations that she has made."