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The deadline to end the childcare vouchers system for new members has been delayed by six months following a Commons debate this week.
The employer-backed voucher scheme — which offers parents vouchers worth up to £55 per week to help pay for childcare — had been due to close to new entrants on April 5. This has now been extended to October, though no exact date has been set. Parents can use the scheme to sacrifice up to £55 per week from their pre-tax salary and allocate it to pay for childcare.
The childcare voucher scheme is being replaced by a new system of tax-free childcare. The new account provides working parents with financial support of up to £2,000 a year per child, as long as both parents earn more than £120 a week.
However, the new system has been beset with problems and take up of tax-free childcare has been well below expectations.
Neil Leitch, chief executive of the Pre-school Learning Alliance, a charity, said: “Given the significant difficulties parents trying to access tax-free childcare online continue to face, delaying the closure of childcare voucher schemes to new entrants is clearly a sensible decision by government.
“With take-up of tax-free childcare still much lower than originally expected and valid concerns continuing to be raised about the level of support the scheme offers to lower-income families, we would suggest that government uses this time to reflect on the effectiveness of the tax-free childcare policy and whether the scheme alone is the best way to provide adequate support to all families who need it.”
Jacquie Mills, the chair of the Childcare Voucher Providers Association said support for keeping the voucher system open from MPs “reflects the 119,000 members of the public that signed a petition to keep the childcare voucher scheme open”.