CAB responds to proposals for childcare tax changes

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Newtownabbey Citizens Advice Bureau has responded to the launch of a consultation by the Treasury on ‘Tax Free Childcare’ plans by stating that a more ambitious and targeted approach is needed to enable parents to get into and stay in work.

Pat Hutchinson MBE, CAB District Manager said: “Childcare is a huge issue for and middle income families in Northern Ireland. Last year, Newtownabbey Citizens Advice handled in excess of 3,000 enquiries relating to families and children’s benefits or tax credits. It is a recurrent problem for many of them in terms of getting into the workplace and staying in it. We know from Employers for Childcare that childcare influences 46 per cent of parents in deciding how many hours to work. And at this time of year with schools on holiday it is a particular problem for our clients.”

She continued: “With any new scheme there are normally winners and losers. In general, this new scheme will be an improvement for parents, as it will increase the amount of money they can gain from £930 a year to £1,200. However, families with one parent staying at home (other than on parental leave or a carer) will lose out as they can access the current scheme but are omitted from the proposed one.

“At a time when low and middle income households are finding it hard to make ends meet, it is difficult to justify a subsidy being available to households earning up to nearly £300,000. More support being available to low and middle families would be a fairer approach when resources are limited.”

Mrs Hutchinson described the government’s proposals as “tinkering at the edges”.

“We know that six out of seven parents here are not accessing their full entitlement under the current system of Childcare Vouchers and Child Tax Credits. There is a strong argument to move to a system with less bureaucracy and more direct provision, which aims available resources at childcare rather than red tape and at lower income households. In the interim, there could be a renewed emphasis from government in Stormont to help people here access their entitlements through an increased promotional effort.”

She added: “Even welcome changes to the current voucher based approaches will leave a huge gap in provision for the vast majority of families. That is the bigger challenge.

“The proposals being consulted on now will not come into effect before Autumn 2015, and it’s not entirely clear how long the existing childcare voucher scheme will continue to run alongside any new scheme. So it’s important to note that changes are still some way off but now is the time to have a say.”

Newtownabbey CAB is based at the Dunanney Centre in Rathcoole.

For help and advice call 028 9085 2271 (9am - 4pm) or email newtownabbeycab@citizensadvice.co.uk