Parents paying 80 per cent of childcare costs of up to £10,000 a child to a registered provider will get the remaining 20 per cent tax-free. But there are very few low and middle-income earners who spend as much as £10,000 a year per child on childcare. The new flat-rate 20 per cent system will see a higher subsidy for those parents who can afford to spend more on good quality care.
But the announcement doesn't address the immediate problem. Families are struggling now to pay for childcare and need help straight away, not in 18 months' time when the changes would take effect. When Nick Clegg was challenged on the delay of help, he responded that the government was keen to get the online scheme right and it would take time to test the logistics.
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