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New childcare support system will lead to 335,000 families missing out on financial help

An estimated 335,000 families could miss out on the vital financial help they need to pay for childcare and stay in work, because of the complexity of the new childcare support system, according to new research.

The Government estimated that 50,000 such families may be affected, but their figures do not take into account the growing numbers of people who are self-employed and on zero hours contracts, according to the Family and Childcare Trust in its report The Childcare Support Gap.

From 2016, there will be four main financial support systems for childcare: tax credits, Universal Credit, existing employer-supported vouchers and the new tax free offer. Some families will also be receiving help with their childcare costs through Job Centre Plus, colleges and through Housing Benefit.

Many families will not know which system will give them the best support. If they opt for the wrong scheme, families could lose vital financial support, and the onus will be on them to know when to switch schemes.

Anand Shukla, chief executive at the Family and Childcare Trust said: 'With an increasing number of people in the workforce whose income changes week-by-week, it is clear that our childcare system is too complex and as a result, many working parents will miss out on the financial help they need.

'This research reinforces the need for a complete overhaul of the childcare system. We need the Government to commit to a new vision for childcare that is simple to navigate and reflects the realities of working families today.'

While there are plans for an online calculator to guide parents through the new support systems, it will not incorporate those many families who have not yet moved to Universal Credit or who remain on their employer-supported scheme.

The families who will be most affected are the increasing number whose wages fluctuate, such as the self-employed, temporary workers, those who rely on commission and people on zero hours contracts - hard-working families who want to get on and better themselves.

The Family and Childcare Trust is calling on the Government to introduce a simple support system that is responsive to families' needs and recognises the reality of modern day working patterns.

Other recommendations include:

- Greater flexibility to switch between the different systems to accommodate the needs of families whose incomes or childcare costs vary from month-to-month.

- A national campaign to inform parents about financial help with childcare costs. This campaign should ensure that families in the existing support systems understand what will work best for them.

- Raising the maximum age of eligibility for disabled children to 18 for both Universal Credit and the tax free childcare vouchers to align eligibility with the Childcare Act 2006.

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