The employer-backed childcare voucher scheme which was due to be closed to new entrants next month will receive a 6-month reprieve

Overhead view of colorful childcare blocks arranged on wood picture id849187158

Intervention by the Democratic Unionist Party MP Emma Pengelly has led to a delay in the abolition of the childcare voucher scheme. The scheme which is currently used by up to 450,000 parents was due to be replaced by an alternative system of tax-free childcare.

The rollout of the new system has hit a number of roadblocks due to confusion of how the system works. Glitches on the HMRC website meant that thousands of parents have been unable to set up a tax-free account and access the money they had paid into their account.

The Government has already taken steps to pay parents unable to access the tax-free childcare payments, costing a total of £966,66 and nearly £40,000 has been paid to parents for any expenses incurred.

Understanding the issues that tax-free childcare system has faced, Education Secretary Damian Hinds conceded that the Government would “keep the voucher scheme open for a further six months to new entrants.”

James Malia, Director of Employee Benefits at Sodexo Engage, comments on the news that Parliament has voted to continue with the current Childcare Voucher scheme:

“The decision by Parliament to potentially overturn the Government’s attempt to abolish Childcare Vouchers by voting to keep the scheme open for another six months is fantastic news for working parents and employers. Working parents across the UK rely on employer-supported Childcare Vouchers to save hundreds, if not thousands of pounds each year on childcare. Sodexo Engage research revealed that 57% of households would have been worse off under the new scheme proposed by the Government. However, by having both Childcare Vouchers and Tax Free Childcare available, parents will be empowered to choose whichever option is best for their families.”