Continue to save up to £1,866 on the cost of childcare each year
The Childcare Voucher scheme allows working parents the opportunity to swap part of their pre-tax salary to pay for registered childcare. As a result, they make savings on their Tax and National Insurance – up to £933 per parent, per year.
How does the scheme work?
Each eligible parent can pay a maximum of £243 per month from their salary into their Childcare Voucher account and use this to pay for registered childcare. They do not pay Tax or National Insurance on this amount, resulting in significant savings.
Anyone who is currently signed up the Childcare Voucher scheme through their employer, and who has made at least one payment into their account in the previous 52 weeks, can continue to use Childcare Vouchers to help them to pay for their childcare, for as long as they are eligible. However, the Government closed the Childcare Voucher scheme to new entrants in October 2018, so it is not now possible to join the scheme.
To remain eligible parents must:
- Stay with the same employer
- Make at least one payment into their account every 52 weeks (more than £0)
- Not leave the Childcare Voucher scheme to join Tax-Free Childcare.
If their circumstances change for a short time, for example due to a period of maternity leave when they are not using childcare, parents may have the option to temporarily pause their salary sacrifice or to reduce the amount they pay into their Childcare Voucher account through their employer. This can be reduced to as little as £1 and we would advise parents, if possible, to continue to make a small payment (even £1 per month) into their account, to allow them to increase their contributions again in the future.
Parents should submit their request to change their salary sacrifice amount to their employer using their online Childcare Voucher account, eVouchers. Individual employers may have rules around how often they permit changes and will have a ‘cut-off date’ by which these requests need to be received, so changes may not be actioned immediately. You can discuss this with your employer.
For more information on how the Childcare Voucher scheme operates, you can download our Employee Guide to Salary Sacrifice and our Employee Terms and Conditions guides here.
If you have any questions about childcare, childcare costs and the best form of support available to you now that Childcare Vouchers are no longer open to new entrants you can call our Family Benefits Advice Service on 0800 028 3008 or email email@example.com.