Childcare Vouchers

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Childcare Vouchers

Your Questions Answered

What are Childcare Vouchers?
How do Childcare Vouchers work?
The Benefits
What to be Aware of
How Childcare Vouchers Could Work
Childcare Voucher Suppliers

What are Childcare Vouchers?

Childcare Vouchers are a form of payment that can be used to purchase childcare for children up to the age of 16 years. This must be legally recognised childcare, this might be:

childminders
nannies
pre schools
playgroups
private day nurseries
before school, after school and holiday clubs

How do Childcare Vouchers work?

Any employer can offer Childcare Vouchers to its employees.

The scheme works by employees voluntarily agreeing that part of their salary can be converted into Childcare Vouchers. The employee and the employer save on the National Insurance Contributions for the value of the voucher.

The employer can use part of the National Insurance savings to off set the cost of administering the scheme.

The Benefits:

For Employees:

Reduced National Insurance Contributions
Easy to use
Available for Childcare 0-16 years
Can be accepted by most childcare providers
You have the freedom to choose the best childcare for your child/ren
Over a twelve month period a parent could save up to the equivalent of a months childcare costs

For Employers:

Reduced National Insurance Contributions
Valuable benefit for employees and new mothers returning to work
Simple to introduce and administer
Assists employees with childcare without direct involvement
Enhanced recruitment and retention package
Excellent post maternity leave benefit

For Childcare Providers:

Certainty of payment
Reduced bank charges
Assists parents with childcare costs
Easy to redeem

What to be aware of:

For Employees:

The salary reduction may have an effect on pension contributions and any salary increment.
Redundancy entitlements may be affected

For Employers:

There will be some administration costs incurred to adopt and run the scheme.

How Childcare Vouchers Could Work

Employees who want to use the scheme are identified and sign up	Employer chooses Childcare Voucher Supplier to administer scheme	Childcarers sign up to be part of the scheme

Employee orders vouchers to the value of their choice	Employer sends order for vouchers to Childcare Voucher supplier	Childcare Voucher Supplier issues vouchers to employees

Employee gives voucher to Childcarer to pay for childcare	Childcarer sends vouchers to Childcare Voucher Supplier	Childcare Voucher Supplier arranges payment to go into child carers bank account by BACS