Asked by: Lord Sutherland of Houndwood (Crossbench - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government, further to the Written Answer by Lord Deighton on 28 July (WA 247), in addition to the "qualitative assessment of the economic impacts" of the Childcare Payments Bill provided in the impact assessment, what specific estimates they have made of the impact on tax receipts from mothers paying income tax and national insurance.
Answered by Lord Deighton
Details of the estimated economic effects from the introduction of Tax-Free Childcare can be found in the Childcare Payments Bill Impact Assessment[1]
Asked by: Lord Sutherland of Houndwood (Crossbench - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty’s Government, further to the Written Answer by Lord Deighton on 28 July (WA 247) what specific estimates they have made of the expected "positive impact" of the childcare element of Universal Credit on work incentives for mothers and corresponding employment rates and tax receipts from mothers paying income tax and national insurance.
Answered by Lord Freud
The announced measures mean from April 2016, families with children who have childcare costs below the defined limits will see an improved financial incentive to work and to work more hours.
Once Universal Credit is fully rolled out many working families will face an improved incentive to work, including 100,000 families who will get childcare support for the first time under Universal Credit. The precise improvement an individual faces will vary according to circumstance.
We have not made a specific estimate of how this feeds through into employment rates and tax receipts.
Asked by: Lord Sutherland of Houndwood (Crossbench - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what is the role of HM Treasury officials in the co-ordination of childcare policy across Government.
Answered by Lord Deighton
The Department for Education leads on childcare policy across government. As in all areas of policy, HM Treasury officials help ensure that policy development is coordinated across departments.
Asked by: Lord Sutherland of Houndwood (Crossbench - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what projections they have made of the impact of directly subsidising childcare costs as proposed in the Childcare Payments Bill on maternal employment rates, and the level of income tax paid by working mothers.
Answered by Lord Deighton
Details of the estimated economic effects from the introduction of Tax-Free Childcare can be found in the Childcare Payments Bill Impact Assessment.[1]
Asked by: Lord Sutherland of Houndwood (Crossbench - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government whether direct subsidies to parents to assist with childcare costs as proposed in the Childcare Payments Bill are intended to improve child development outcomes, free up parental time to work, or both.
Answered by Lord Deighton
The Childcare Payments Bill will introduce the Government’s new tax free childcare scheme. As part of our long term economic plan, Tax-Free childcare will enable more parents to go out to work, if they want to, to provide greater security for their families.
Asked by: Lord Sutherland of Houndwood (Crossbench - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty’s Government what projections they have made of the impact of the childcare element of universal credit on maternal employment rates, and the level of income tax paid by working mothers.
Answered by Lord Freud
It is well known that childcare costs can be a significant barrier to maternal employment, which is why the Government is investing in childcare in Universal Credit. Universal Credit will cover childcare costs for families where the lone parent or both parents in a couple work any hours, whereas Tax Credits childcare support is only payable past 16 hours worked per week. At Budget '14 the Government announced an increase in the rate of childcare support in Universal Credit from 70% (as per the current system) to 85% of eligible childcare costs, up to defined limits, from April 2016. These measures combined mean that around 500,000 working families will get more out of the money they earn, including 100,000 families who will get childcare support for the first time under Universal Credit.
We would expect the changes in childcare support under Universal Credit to have a positive impact on work incentives for mothers, affecting maternal employment rates and tax receipts from mothers paying Income Tax and National Insurance.