Government online childcare scheme could give households £2,000 annual boost
Almost 2 billion working households could be given a much needed boost by a new government childcare initiative that could be worth as much as £2,000 per child from September 2015.
The scheme will function online, and will apply to all children up to the age of 12.
Prime Minister David Cameron identified that it was working class householdís who are currently having their incomes ësqueezedí by the rising cost of living who will benefit the most from the new scheme, whilst Deputy Prime Minister Nick Clegg gave assurances that using the scheme would be simple and easy.
However, Labour criticised the scheme for coming ëtoo little, too lateí, and called for action to be taken now in order to help the countryís lowest earners, who have been financially inhibited by the constant rise in the cost of living at a rate faster than wage rises.
The issue of rising childcare costs has dominated political debate in recent times, with Labour estimating that they had risen by a monumental 30% since 2010.
The Family Childcare Trust also estimated that the average weekly price for 25 hours of childcare for infants under the age of 2 was £109.89, which represents a substantial portion of a low income workers wage.
The announcement of the new scheme is likely an election orientated move by the current administration, in order to attract the attention of working class voters who have identified the current tax-free voucher scheme as inadequate for purpose.
So far, only 5% of Britainís employers have entered onto the scheme, and just 450,000 families have actually benefited from its introduction.
Government ministers have forecasted that the new scheme will enable almost double the number of parents to receive help with their childcare costs, with the estimated support per child now rising to £2,000 for all families where both parents are in employment and collectively earn less than £150,000 each year.
When it was originally announced a year ago, the government said the maximum support available would be £1,200 per child and that it would be open to families where both parents work and earn less than £150,000 a year.
The scheme is expected to run for more than 7 years, and its release date has now been brought forward to September next year.
The primary elements of the scheme are that parents will contribute 80% of the total childcare costs they have to pay for up to £10,000 for each child, but will then receive 20% of the costs completely tax free from the government.
Parents will have to create an online account for themselves, and doing this will ensure they qualify for the 20% financial support for each child, with a maximum of £2,000 each year.
It is expected that around 2 million households will benefit from the new scheme, as it extends to all working households that receive higher than £50 each week from their job, all parents on maternity leave, and those who are undergoing a business start up.
Mr Cameron said: "This is about helping all families, but particularly those families that do feel their finances are squeezed,
Shadow childcare minister Lucy Powell: "Families over this parliament have lost more than they're going to gain"
"I want to give families greater stability, greater peace of mind, greater security. And obviously being able to have £2,000 tax relief per child is going to be a huge help to millions of families across Britain."
Mr Clegg highlighted that the structure of the new scheme would be clear and easy for users to navigate, and identified that the government had consider other price ceilings before deciding that the £150,000 cut off point was in the best interests of the people it is aimed at helping.
"This is really simple." Mr Clegg said, adding: "For every 80p you pay, the government will pay 20p. It's as simple as that."
The coalitionís announcement of the upcoming scheme is the latest in an ongoing pre-election battle to win the support of the working class electorate.
Previously, the government raised the personal allowance threshold to above £10,000 each year, in a bid to try and help lower earnings households lose less money from their income tax.
They have also instigated other ploys such as raising the free school entitlements of 3 and 4 year olds to 15 hours each week, up from the previous 12.5, whilst Labour have attempted to obtain the upper hand at this early stage by outlining that they would raise this to 25 hours each week, should they win the General Election next year.
Labour also attacked the government for their current lack of childcare policies, arguing that they will all culminate in households contributing even more of their disposable income on childcare by 2018.
"Of course any childcare support is welcome but this government has done nothing in this Parliament to help parents experiencing a cost-living crisis," said shadow children's minister Lucy Powell.
"David Cameron has cut support for children and families by £15bn since he came to office, and today he confirms that no help will arrive until after the election. This is too little, too late."
Children's Society chief executive Matthew Reed praised the upcoming scheme, identifying that it will make a ëhuge differenceí to working class families, though he also argued:
"While this move is extremely welcome, it is critical these families truly benefit from it. Greater assistance for these families must be the focus of tomorrow's Budget... This must not be a case of giving with one hand and taking with the otherî.