Families missing out as childcare funding ‘too complex’

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

The Government estimated that 50,000 such families may be affected but its figures did not take into account the growing numbers of people who are self-employed and on zero hours contracts, said the Family and Childcare Trust.

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, the Trust said.

Some families will also be receiving help with their childcare costs through Job Centre Plus, colleges and housing benefit.

Many families will not know which system will give them the best support, and if they opt for the wrong one, they could lose vital financial backing, the Trust said.

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.

Anand Shukla, chief executive at the 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 government to commit to a new vision for childcare that is simple to navigate and reflects the realities of working families today.”

The Trust called 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 included greater flexibility to switch between the different systems to accommodate the needs of families whose incomes or childcare costs vary from month-to-month, and a national campaign to inform parents about financial help with childcare costs.

The research findings and recommendations have been published in a new report by the Trust – The Childcare Support Gap.

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