Tax credit reforms take toll on family childcare costs

24 February 2012 3 mins read Janaki Mahadevan Early Years

Up to 44,000 fewer families are getting help with their childcare costs, since cuts to the childcare element of the working tax credit last April, according to the Daycare Trust's annual Childcare Costs Survey.

In April last year, the amount families could claim back from their childcare costs dropped from 80 per cent to 70 per cent. Research by the Daycare Trust found that the average claim for childcare costs has now fallen by more than £10 a week, costing low-income families more than £500 a year. Furthermore, 44,000 fewer families are receiving any of this support.

Anand Shukla, chief executive of Daycare Trust said: "We warned that the government’s decision to cut tax credits would mean that some families found that they were no longer better off going to work once they had paid for childcare. The latest HMRC figures reinforce the Daycare Trust’s fear that the loss of this vital lifeline is forcing families out of work and in to poverty.

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