Rules for restarting childcare vouchers
13 August 2019
Following recent questions into the Advisory Service, we would just like to remind our members that the rules have not changed regarding the restarting of childcare vouchers or directly contracted childcare.
Advice has been given from some childcare voucher providers that as long as the below conditions have been met, entrants can re-enter the scheme and still benefit from the Income Tax and National Insurance savings.
“If you joined a childcare voucher scheme or a directly contracted childcare scheme on or before 4 October 2018
You can keep getting vouchers or directly contracted childcare as long as:
- your wages were adjusted on or before 4 October 2018
- you stay with the same employer and they continue to run the scheme
- you do not take an unpaid career break of longer than a year
You can take up to £55 a week of your wages, which you do not pay tax or National Insurance on.
How much you can take depends on the amount you earn and when you joined the scheme.”
Due to a change in the wording around the ‘unpaid career break’ and the ‘52-week break from receiving vouchers’, some providers may have misinterpreted guidance.
The CIPP can confirm the guidance below shows a clearer definition of the rules when an employee is eligible to restart employer supported childcare vouchers.
“Restarting childcare vouchers or directly contracted childcare
An employee can choose to take a break from getting your childcare vouchers or directly contracted childcare. They can start again as long as the following apply:
- It’s within 52 weeks of the date they stopped
- You’re still their employer
- They have not told you that they want to leave your scheme (for example, because they’ve started using Tax-Free Childcare)”