26 / 6 / 2014
Parents often find that combining work and family responsibilities can be challenging - even more so when they work in an organisation that delivers care 24 hours a day, 365 days a year. Being able to access high-quality childcare that is both accessible and affordable is essential to a healthy work-life balance.
The benefits of employer-supported childcare can include being known as a family-friendly employer, better recruitment and retention of staff, reduced absenteeism, a more motivated workforce, as well as financial savings for employers and employees.
Employers can support staff who have childcare responsibilities and who want to continue working in a variety of ways:
- by providing information and guidance on government support available, for example tax credit system, voucher schemes and where to go for advice
- by reviewing their working practices, for example, moving towards family-friendly policies, flexible working options
- by supporting childcare needs of their employees by liaising with and supplying information on the location of local nurseries and childminders
- by providing on-site nurseries where possible, or private finance Initiatives to provide nursery places locally.
The Government-supported scheme, commonly known as childcare vouchers is available to help working parents with their childcare costs. Any employees who make use of the scheme will make savings by not paying tax or national insurance contributions on their childcare costs up to a certain amount each month/week. As an employer, you can also make savings by not paying national insurance contributions on this amount. A basic rate tax payer can save around £900 a year and, as an employer, you can save up to £400 per employee. The amount an employee saves will depend on their tax band. The amount employers save will depend on how many employees use the scheme as well as whether you also use a voucher company or self-administer the scheme.
If you choose to offer your staff employer-supported childcare, the scheme should be open to all eligible employees with parental responsibility for a child up to the age of 15, or 16 if they are disabled, however they must be using Ofsted registered childcare.
Financial help for childcare costs
Childcare element of tax credit
This is aimed specifically at working parents to help with the cost of registered and approved childcare, and can cover a percentage of childcare costs.
Further information on the available rates can be found at HM Revenue and Customs.
This is a regular payment made to anyone bringing up a child or young person under 16, or under 20 if they stay in approved education or training. Members of stff could also receive Guardian's Allowance if they are bringing up someone else's child because one or both parents have died. This is paid on top of child benefit.
For more information and advice on child benefit visit HM Revenue and Customs or contact the tax credit helpline on 0844 8569912.
Childcare vouchers can be offered in addition to salary but are more commonly offered as a ‘salary sacrifice’. This means that a specific amount of salary is replaced by childcare vouchers.
The childcare voucher schemes can be administered externally by a voucher company who will take on all the administration, promotion and payroll elements to running a scheme. Costs vary but most employers will still make savings on their employees benefiting from the scheme. Some employers choose to operate the scheme internally which means they take on the administration but keep costs down.
Many childcare providers accept childcare vouchers as part payment for a child's place, and all they need is a bank account for payments to be made into. Most companies that provide a childcare voucher service offer these electronically, so the monthly amount is paid into their account like any other payment.
For more information on childcare vouchers see our dedicated web page.
For details on setting up a childcare voucher scheme, see the Family and Childcare Trust website.
Since 1 September 2004, all NHS bursary-funded students who have dependent children have been able to apply for extra help with registered and approved childcare costs. This new childcare allowance is paid as a supplement to the existing NHS funded bursary.
The allowance is available to students with dependent children aged under 15 (or aged under 17 for children with special educational needs) on the first day of the academic year. This allowance pays up to 85 per cent of the actual childcare costs to a net maximum payable of £127.50 per week for one child and £189.55 per week for two of more children. Every year, childcare allowance is calculated individually and the amount awarded will depend on individual circumstances and the income available to an individual and their family.
Please note not all students who apply for childcare allowance will be entitled to receive it.
More detailed information is available from the NHS Bursary website or by calling 0300 3301345 or 0191 2790570.