Childcare voucher schemes close as working parents reach record highs

4 Oct 2018 By Hayley Kirton

Experts also warn lack of flexible working options limiting mothers’ options

Three-quarters (74 per cent) of women with dependent children are now employed, data from the Office for National Statistics (ONS) revealed yesterday – the highest level since records began. 

The figures for April to June 2018 represent an increase from 68.9 per cent in 2013 and 61.9 per cent in 1996, when comparable records started. The proportion of employed men with dependent children also increased to a record high of 93.1 per cent, up from 90 per cent in 2013 and 87 per cent in 1996.  

But the revelation coincided with a shake-up to a key employee benefit aimed at working parents. Childcare vouchers schemes, which allow staff to sacrifice some of their salary in return for subsidised childcare costs, have been closed to new entrants as of today.

Although people already enrolled onto programmes will continue to receive the benefit, they will not be able to rejoin if they leave and will not be able to sign up to another organisation’s plan if they change jobs.

The childcare voucher scheme is being replaced by tax-free childcare, which is run through HM Revenue & Customs (HMRC). However, the two differ in how they operate, with warnings raised that some employees would be financially worse off if they ditched vouchers in favour of the new scheme. 

“It's a real shame that the government has moved ahead with the plans to close the childcare voucher scheme to new entrants from today,” said Julie Barker, board member of the Childcare Voucher Providers Association and senior manager, product management at Hawk Incentives. 

“Not only has this been a game-changing benefit for a huge number of employees up and down the country, it's also been a really transformational way for businesses to support their working parents and show they're invested in making affordable childcare a reality for their staff.”

People Management survey, published last year, revealed 90 per cent of readers worked for an organisation which ran a childcare voucher scheme

Meanwhile, the ONS figures found a sizeable proportion of working mothers are in part-time roles. Approximately half (49.6 per cent) of working mothers worked fewer than 30 hours in their main job, excluding overtime.

“Flexible work offerings have improved steadily, and new initiatives such as gender pay gap reporting – and to some extent, shared parental leave – have helped shine a light on the issues faced by working mothers,” said Yvonne Gallagher, employment partner at Harbottle and Lewis. 

“However, where flexible working opportunities are still not available, there’s a real question to be asked about how far a requirement for full-time working impacts more harshly on women with dependent children, and therefore potentially amounts to indirect discrimination on grounds of sex. 

“The evidence from the ONS appears to support the view that mothers with dependent children may be less able to work on a full-time basis, though they do not of course provide evidence of the reason fewer women with children are working full-time.”

Earlier this week, the government revealed it was considering introducing two policies aimed at helping parents in the workforce – imposing a duty on employers to take into account whether a job could be done flexibly, and reflecting this in their advertising, and requiring organisations with 250 or more staff to disclose their parental pay and leave policies.

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