The new childcare support system is so complex that some 335,000 families could lose out on financial help, research has revealed.
The government has estimated that 50,000 families would be affected, but this does not take into account parents who are self-employed or on zero-hour contracts, the report by the Family and Childcare Trust has revealed.
From 2016, parents will be able to claim support from four financial systems: tax credits, Universal Credit, existing employer-supported vouchers and a new tax-free 'voucher'. Some parents will also be able to claim help with childcare costs through their local Jobcentre Plus, colleges and through housing benefit.
But the Family and Childcare Trust charity has highlighted a problem with the four new systems: if parents choose the wrong scheme, they could lose out on vital financial support – and the onus will be on the claimants to find out which system is right for them.
It points out that while there will be online calculators for parents to work out the best scheme for them, it won't help those parents who have not yet moved to Universal Credit or those who are still on their employer-supported scheme.
It says that those who are most affected will be parents whose wages fluctuate, such as the self-employed, temporary workers and those on zero-hour contracts.
The Family and Childcare Trust has come up with the following recommendations: • There should be greater flexibility so families whose income varies from month to month can switch between the different childcare support systems more easily.
• The government should run a national campaign to inform parents about the types of help available for their childcare costs.
• Disabled children should be eligible for both childcare element of Universal Credit and the tax-free childcare scheme until the age of 18.
Anand Shukla, chief executive at the charity, said: With an increasing number of people in the workforce whose income changes week by week, it is clear that our childcare system is too complex and, as a result, may working parents will miss out on the financial help they need.
"This research reinforces the need for a complete overhaul of the childcare system. We need government to commit to a new vision for childcare that is simple to navigate and reflects the realities of working families today." Moneywise are offering Yahoo readers a free copy of their magazine – simply follow this link!