More families set to benefit from tax-free childcare

More families set to benefit from tax-free childcare

Parents on maternity and paternity leave will be eligible to receive tax-free Childcare Vouchers under the new childcare scheme, the government has announced.

Under initial plans, only families where both parents worked could apply, but now parents on paid maternity, paternity or adoption leave can claim.

Couples where one parent works and the other gets Employment and Support Allowance or Carer's Allowance will also be eligible.

The plans were initially announced in the Budget earlier this year, and will allow working families to claim up to £1,200 per child for childcare costs from autumn 2015.

Chancellor George Osborne said: "Tax-free childcare will help working parents by giving them more choice and better access to the quality, affordable childcare they need."

Eligible parents need to earn less than £150,000 per year each and not already be in receipt of tax credits or an employer childcare scheme.

Chief Secretary to the Treasury, Danny Alexander, said: "Tax-free childcare will put money back in families' pockets, saving the typical two child family up to £2,400 per year on their childcare costs and allowing parents more choice to work the hours they want."

From autumn 2015, in the first year of the scheme, only children born in or before September 2010 can claim, rising to six year olds in the second year, and this will continue to rise until children under 12 are eligible.

Government asks for parents' view

The government is today launching a 12-week consultation, asking parents for their views in how the scheme should work.

It will look at who should be able to receive the vouchers, how the scheme will be implemented, as well as how parents will be able to receive the tax-free discount.

Osborne added: "We want to make the new scheme work in the way that is best for parents, so today we are asking for their views, and I'd like as many parents as possible to tell us what they think."

This can be done via the website at or by emailing