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New childcare help for working parents: Is it fair?

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Working parents have been screaming out for help with childcare costs as many continue to struggle to make ends meet, with either stagnant or reduced wages trying to cover the increasing cost of childcare. It seems the government have finally listened and with planned tax breaks aimed at helping families where both parents work, hard working families will finally benefit. But this has divided opinion with many claiming it is unfair towards families that have sacrificed a wage to look after their children. So is this tax break really fair?

Government plans

The government have been trying to encourage mums to return to work after having children and for many families, they’ve had no choice but for both parents to work, just to cover the ever increasing cost of living. However, apart from means based working tax and child tax credits, there has been no specific financial help for working parents to assist with the cost of childcare. Despite the government’s attempts at getting mums back to work, the reality for many is they will either be no better or worse off, if they paid for childcare in order to return to work. But this tax break, which will be implemented in the form of an online voucher system, will now help 2.5 million households. Parents earning up to £150,000 each will be eligible to claim, with vouchers worth up to £1,200 each year per child.

How will it work?

For every 80p a family pays towards childcare, the government will put in 20p up to a limit of £1,200 per child each year. Parents will then be able to redeem the vouchers and use in any Ofsted-registered provider. The current childcare voucher scheme used by employers, where employees receive a small tax break taken from the cost of childcare, will eventually be phased out to make room for the new scheme. Further more, families on low incomes where both parents work and that are entitled to claim the new universal credits, will benefit more from the new scheme and receive extra payments that will cover up to 85% of childcare costs. The plan is to introduce the scheme for under 5s by 2015 and extended to cover under 12s by 2020. It is described by David Cameron as “a boost directly to the pockets of hard-working families”.

Criticism

However, with the new plans comes criticism, with many declaring them an insult to single income families or that it simply benefits those who don’t really require help, leaving the poorest families continuing to struggle. Many support groups that encourage mothers to stay at home to raise their children, are particularly opposed to the plans, believing they label stay at home mums or dads as ‘less valuable than those that both work’. While their sentiments can be understood, others will state that mums or dads choosing to stay at home to raise their children don’t need support with childcare and are in the enviable position of being able to stay at home and raise their children, rather than having to return to work and leave their child with a childminder or in a nursery. After all, for many, returning to work is a necessity, not a choice.

Children at childcare

Single parents

Also single parent families can also see this as a smack in the face, with many being hit in the pocket since child benefit was taken from those earning £60,000 or more, yet families with both parents earning £100,000 between them are still able to claim. With families with a joint income of up to £300,000 being able to benefit from this new scheme, it’s easy to understand why many are declaring it unfair. It begs the unanswered question: Why does a family earning £300,000 a year deserve help towards childcare more than a single working parent earning £60,000 that has already lost their child benefit?

The poorest families

Critics have also claimed that the scheme will only benefit 160,000 families in the bottom 40% of income distribution compared to 1.7million families who are in the top 40% and so is still leaving the very poorest unable to return to work simply because of childcare costs. There is therefore call for the government to adjust their plans so they specifically help the poorest families.

Finding a clear and fair middle ground may never be possible and for every new scheme introduced to help one section of society, another will feel penalised. It’s becoming clear that society is becoming less inclined to support those that have lived on benefits all their lives yet choose to have many children, but at the same time, stating that you shouldn’t have children if you can’t afford them, isn’t quite so clear cut; especially for working parents when you take into account the UK has some of the highest childcare costs in the world!

A level playing field?

So what is the answer? It seems the dynamics of society are changing quicker than the government can keep the even playing field and while the intentions of helping hard working families are admirable and necessary, the boundaries that have been set will undoubtedly cause debate which may overshadow the root cause of the issue – we are now living in a society where the cost of living has risen more than our wages, including childcare. If the government wants more parents back to work helps to redress the balance, then surely help should be on offer to support that; this new scheme is at least a step in the right direction.

There will always be those who are poorer than others, those who will continue to struggle despite help on offer and those who don’t require help but will benefit from changes brought into practice. While there are clearly still flaws with the new system, working parents should at least feel they have finally been listened to and mark it as a small victory for them and a giant leap for society.

 

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About Rebecca Robinson

About Rebecca Robinson

After spending the last 8 years juggling life as a mum of two, wife and working full time as a Project Manager for a global telecommunications company, Rebecca Robinson made the decision to follow her love of writing and took the plunge; turning her passion into a full time career. Since becoming a full time writer, Rebecca has worked with various media and copy-writing companies and with the ability to make any topic relevant and interesting to the reader, now contributes to The Working Parent on articles ranging from credit cards to teenage relationships. Ever the optimist, Rebecca's dreams for the future include a house in the country filled with children, dogs and horses in the field!

Website: Rebecca Robinson

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