£1,200-a-child voucher scheme for working couples

The scheme will be announced today by Chancellor George Osborne. Picture: Getty

Mr Osborne will unveil details of the £1 billion online voucher system that, the coalition government says, will benefit about 2.5 million UK households,

Families with two working parents earning less than £150,000 each are eligible for the scheme that will cover 20 per cent of childcare costs up to a limit of £6,000 per year per child – the equivalent of £1,200.

Ministers will say that carers with children and mothers on maternity leave will be among those eligible for the scheme, which will be formally launched later today.

However, about 1.2 million parents – mostly mothers – who choose to stay at home to look after their children, will not be eligible for the help.

The scheme will be introduced for children under five by 2015 and extended to cover all those under 12 by 2020.

In two-parent families where one parent does not work, families will not benefit from the scheme, which is today being put out to a 12-week consultation period.

Critics have claimed the scheme would penalise stay-at-home parents, while Labour said the government had already taken support away from parents and the plans proved it was “out of touch”.

The Chancellor defended the scheme, which will see parents able to open an online voucher account with a provider and have their payments topped up by the government.

Mr Osborne said: “This government is on the side of people who want to work hard and get on in life.

“Tax-free childcare will help working parents by giving them more choice and better access to the quality, affordable childcare they need.

“We want to make the new scheme work in the way that is best for parents, so today we are asking for their views, and I’d like as many parents as possible to tell us what they think.”

Half of the funding for the scheme will come from the abolition of the previous system of employer-supported childcare vouchers, and in part by funding switched from elsewhere in Whitehall.

For every 80p families pay in, the government will put in 20p up to an annual limit for each child of £1,200.

The vouchers can then be redeemed against childcare from any provider registered with the authorities.

Chief Secretary to the Treasury, Danny Alexander said working families with two children could save up to £2,400 a year on their childcare costs under the changes.

“We won’t let childcare costs stand in the way of parents’ ability to work if they want to.”

“Tax-free childcare will put money in families’ pockets allowing parents more choice to work the hours they want.”

Labour families spokeswoman Sharon Hodgson warned that large numbers of households would not receive help towards what she said were soaring childcare costs.

She said: “Only David Cameron’s government could be so out of touch that they expect families to be grateful for help with childcare in 2015 when they’ve already seen costs spiralling and support taken away.”