As announced in April’s Budget statement, the Government proposes to introduce a new childcare voucher system from 2015. Yet research* from Jelf Employee Benefits found that over a third (36%) of employers who currently offer a childcare voucher scheme are considering scrapping their existing scheme long before the replacement system is finalised or available. Jelf is concerned that such a decision by employers may, in extreme circumstances, force some employees to re-evaluate whether they are financially able to continue working.
Steve Herbert, head of benefits strategy, Jelf Employee Benefits said: “With more than 2 years before the proposed replacement scheme is available, it’s difficult to see why employers would want to remove their Childcare Voucher offering earlier. Although the percentage of employees who use this benefit is relatively low, for those that do, it is often a key incentive, and an important bridge to meeting the ever growing costs of childcare in the UK. If employers remove this benefit now, they risk losing key employees, and disengaging many others.”
Jelf is also highlighting that there are some key changes between the existing schemes, and the proposed replacement in 2015. The new system is intended to only be available to two parent families where both parents work, and is only initially targeted at children under age 5, whereas the current system is available for two parent families with only one income, and for most school age children. It is proposed that those who will be worse off under the new system will be able to retain their existing rights, yet crucially this may only be available where employees are able to continue to save in their current provision in the run up to the 2015 change.
Herbert continued: “If employer’s pull the plug on their Childcare Voucher offering prior to the commencement of the new system, they are condemning their workers to a period with no Government support for this significant daily cost, and also potentially preventing some parents from ever again being able to achieve such support in the future. Jelf would therefore strongly urge employers to consider the implications to both employees and employer before any decision to remove Childcare Vouchers is taken.”