A Working Solution; Help on Child Care Costs So Mothers Can Return to Jobs
MORE than one million working couples and single parents are to get a substantial part of their child care costs met by the Government.
The child care tax credit will allow low to middle income families to claim back 70 per cent of child care costs against a maximum of [pounds sterling]100 a week for the first child and [pounds sterling]150 for two or more children.
This applies to children up to the age of 11. Parents will have to submit receipts for weekly child care payments and the Inland Revenue will refund the money either by cheque or in wage packets.
The scheme was unveiled by the Chancellor as a key part of his Budget strategy for encouraging mothers to return to work. He said the scheme, costing an estimated [pounds sterling]1billion a year, would remove the dilemma that many parents face - being unable to work because of child care responsibilities or seeing most of their wages going to pay someone to look after their offspring.
The Chancellor told MPs that the new
payment would put high-quality child care within reach of people who have never been able to manage it before. He said: 'Child care will, from now on, be affordable for the many and not the few.' The amount couples actually get will vary according to their circumstances.
Writing in the Daily Mail today, Tony Blair pledges that a couple with two children and an income below [pounds sterling]17,000 will receive 70 per cent of their child care costs. He insisted it will also benefit higher earners on up to [pounds sterling]30,000.
Mr Brown said the money will have to be spent on approved childminders, Mr Brown said the money will have spent on approved childminders, day nurseries and council-approved out-of-school clubs, although this list will be reviewed in two years.
Critics warned that the scheme may have its limitations because there are not enough qualified child carers to go round.
Many lone parents and working couples are forced to rely on informal unqualified child minders, family and friends who will not be eligible for the tax credit. That might place a curb on the number who are able to return to work.
The new child care credit will be paid to families as part of the Working Families Tax Credit which will replace the old Family Credit in October 1999.
On the surface, the new child care handout offers a lot more help than the existing child care subsidy introduced by the previous Tory administration.
That scheme put an extra [pounds sterling]60 a week in the pockets of working families or single parents for spending on child care - which would otherwise have been knocked off their benefits. Under the new scheme families claiming for two children will get 70 per cent of [pounds sterling]150 - [pounds sterling]105 a week back. For one child it will be 70 per cent of a maximum of [pounds sterling]100 - [pounds sterling]70 a week. Another advantage of the new child care credit is that it is more helpful to those on the lowest incomes. The old scheme provided no help for those earning less than [pounds sterling]77 a week.
Another advantage of the new scheme is it will cover 1,110,000 families compared to 710,000 under the previous regime, and it will benefit people further up the income scale. Child care campaigners were pleased with Mr Brown's proposals. Colette Kelleher, director of national child care charity the Day Care Trust, said the new tax would help transform the lives of millions of people. …