Stuart Anderson MP has called on Ministers to reform eligibility criteria for Tax-Free Childcare, after it emerged veterans in receipt of immediate pensions are not eligible for support that is worth up to £2,000 per child each year.
Tax-Free Childcare (TFC) provides financial support for working parents with the cost of childcare. It is advertised as being available for working parents of children aged 0-11, or up to 17 for eligible disabled children. To apply, each parent must earn at least the equivalent of the National Minimum Wage or National Living Wage for 16 hours a week on average.
In correspondence with Stuart, Ministers have stated that income from an army pension is not eligible. This is despite it being taxed as earned income. Under the Armed Forces Pension Scheme (AFPS), a veteran can claim an immediate pension if they have served until the age of forty or have at least 22 years' service.
Many veterans then work in civilian roles until retirement. There are 2.4 million veterans in Great Britain. South Shropshire alone is home to over 4,000 veterans, representing almost one in ten households in the constituency.
For every £8 parents pay into their childcare account under the scheme, the government will add £2 up to a maximum of £2,000 in top up per year for each child up to age 11 and up to £4,000 per disabled child until they are 17. Parents can then receive up to £500 (or £1,000 if their child is disabled) every three months.
Since being contacted by a constituent about the issue, Stuart has raised it twice with Treasury Ministers. Chief Secretary to the Treasury Darren Jones MP has said there are currently "no plans" to amend the requirements. Stuart has now called on the Minister to kickstart a review of the access requirements in order to better help veterans with access to childcare options.
Stuart Anderson MP said:
“South Shropshire is proudly home to more than 4,000 veterans, representing almost one in ten households in the constituency. Having served in the Armed Forces myself, I know veterans go on to occupy various civilian roles and enjoy family life. So, I am concerned that many veterans are currently excluded from accessing the support available via Tax-Free Childcare. This is because their army pension is not classed as income under the scheme, although it is taxed as such. As up to £2,000 can be claimed each year, this is a significant level of support that veterans cannot currently access. So, I have called on Ministers to kickstart a review of the access requirements.”
