Following a six-month reprieve, the employer led childcare voucher scheme will no longer be available to new applicants as of 4th October 2018. This will instead be replaced by the government backed tax free online voucher scheme, which will become the only childcare funding option available to new applicants from there on out. Below is everything you need to know about the new scheme and how to prepare for this change.
Under the new scheme, which was originally introduced in April 2017, working parents are required to pay money into an online account on the HMRC website. The government will also make tax free contributions up to a total of £2,000 per child per year. The motivation behind this scheme was to ensure all working parents received a guaranteed amount of childcare support, as opposed to the employer led scheme which was a non-mandatory initiative and therefore not offered by all employers.
Ahead of the deadline it would be wise to inform staff of the changes to the available childcare support options. This can be done through workplace posters, formal letters and holding a series of informal meetings in which the situation can be made clear. It is important that staff understand that those who have signed up to the employer led scheme, in which they are paid up to £55 per week in childcare vouchers by way of salary sacrifice, will still be able to receive childcare support in this way following October’s deadline. Interested staff should be encouraged to apply as soon as possible, as no new applicants will be accepted following the deadline.
Employers should review and amend existing workplace policies on childcare support to reflect the new scheme. HR and payroll departments also have an important role to play in keeping an accurate record of which employees should be issued with the childcare vouchers. In order to avoid costly errors, it is imperative to ensure personnel files remain up to date with the necessary information.
Line managers are often the first port of call should employees have any concerns over their childcare support options, therefore managers should be educated on the issue and comfortable providing advice to working parents. It would also be useful to provide resources that managers can use to address any frequently asked questions around using the governments new online system, which may initially be an issue for less ‘tech-savvy’ employees.
Employers may also be concerned about staff becoming disgruntled with the governments new online system, especially as critics have suggested it could lead to some parents losing out on money they would have received under the previous employer led scheme. With this in mind, employers should ensure line managers and HR personnel are prepared for any potential disputes that may arise from aggrieved employees. To help appease any ill feeling employers may consider other methods which provide further support to working parents. For example, taking an improved attitude towards flexible working requests, including home working, for those with childcare commitments could significantly reduce the need for childcare costs and help keep working parents on side.
Employers need to make sure staff are aware of their childcare support options well ahead of October’s deadline. Although many may fear these new requirements will reduce their ability to support any new parents that join their organisation, it is important to consider other alternatives to ensure their workplace remains an attractive option for working parents.