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Childcare vouchers: Government scheme closes to new applicants

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A government childcare voucher scheme, which was kept open after an intervention by the DUP, closes to new applicants on Thursday.

The employer-backed scheme allows each parent to save up to £933 per year and is used by up to 450,000 people.

Mother-of-two Alison Bingham, whose childcare costs stand at £14,000 a year, said the scheme represented a massive saving for her and her husband.

From now parents will be able to access a newer Tax-Free Childcare scheme.

The scheme does not depend on the backing of an employer but suffered a series of problems earlier this year.

Northern Ireland mother Alison Bingham saves almost £2,000 per year through childcare vouchers
Northern Ireland mother Alison Bingham saves almost £2,000 per year through childcare vouchers

"Our childcare costs, with one child in primary school and one child in pre-school, is still the same cost approximately as our mortgage payments every month, and that has gone down because of school," Alison said.

"Getting almost £2,000 a year tax free is a massive saving for us, particularly with all our other bills going up."

Any parent already enrolled in the scheme will continue to be able to receive the vouchers, but new applications will not be considered.

Aoife Hamilton from Employers for Childcare
Aoife Hamilton from Employers for Childcare said the newer scheme is "not the best option" for many families

However, some people will be worse off under the newer scheme.

Aoife Hamilton from Employers for Childcare said: "Tax-Free Childcare is a good form of support for some parents, but it's not the best option for many families.

"Two thirds of the parents who contact us are better off on childcare vouchers, or another form of support. -Staff who rotate, such as those in the health service, are going to lose out on their next rotation."

childcare vouchers graphic

Treasury Chief Secretary Liz Truss said the issue with the current childcare vouchers scheme is that "only people whose employers sign up to the scheme are eligible".

She added: "Under Tax-Free Childcare, everybody will be eligible, regardless of whether they are self-employed or working for an employer."

While there are benefits to both schemes, parents will now no longer have a choice.

Ms Hamilton said Employers for Childcare receives inquiries from parents every day.

"I've been speaking to Jen, who's expecting twins in November and would be better off on childcare vouchers, so she's going to miss out financially, she is anxious and worried about that," she said.

"For some parents, it's already too late as their company's payroll deadline to join the scheme has passed."