Childcare vouchers Q&A

Should the current childcare voucher scheme be extended to cover home support for elderly and disabled relatives? Vicki Arnstein asks four experts what they think.

The debate over extending childcare vouchers to include other types of care is not a new one, but as the general election approaches, the campaign around this potential vote winner is gathering pace.

Salary sacrifice on childcare vouchers was approved by the government in April 2005. Employees whose employers offer access to a scheme can sacrifice a proportion of their gross salary (currently up to £55 a week) in exchange for vouchers to pay for approved childcare.

The sacrificed amount is exempt from tax and national insurance (NI) contributions, and is also free of NI for employers.

This makes it an attractive proposition for parents and employers, but there are some potential pitfalls. Low earners, for example, could find their entitlement to state benefits is affected.

The Care Vouchers Campaign, members of which include care charities, childcare voucher providers and several large employers, has been lobbying the government for the past two years for a generic care voucher that could be used to pay for childcare or care support services for elderly and disabled dependants.

Campaigners say access to this type of support will rapidly become a key employee benefit and is something government policy should encourage.

But opponents say vouchers are not appropriate for other types of care, are potentially unfair to low earners, and could help shift responsibility for elder and disabled care from the state over to the individual carer.

Q What's your view on extending care vouchers?

A Children of older people or the spouses of disabled people are carrying the burden and costs of care. There is a role for the government in encouraging employer support through allowing NI and PAYE exemptions for those who want to exchange part of their salary for care vouchers.
Stephen Burke
Chief executive of charity Counsel and Care, and spokesman for the Care Vouchers Campaign

A The idea is to extend to all care so you have a generic care voucher, and at different periods in your life you can dip in and out of [the scheme]. We have an ageing population with people living into their 80s and 90s. We have staff looking after elderly relatives and often what they do is take a sickie.
Iain McMath
Managing director at childcare voucher provider Sodexho Pass

A I am on the side of employers using avenues such as flexible working before they start looking at things like a voucher scheme through salary sacrifice.
Alison Hunt
Equality and diversity officer at Staffordshire University, and author of a flexible employment options report into eldercare

A We [the TUC] are not against extending childcare vouchers to other forms of care if that is all that's on offer. It is better for people to have some help than none, but we are quite critical of [vouchers] as not being the best way.
Richard Exell
Senior policy officer, Trades Union Congress

Q Would care vouchers work the same way as childcare vouchers?

A There is no reason why the tax-exempt limit has to be £55 per week, although for parents and carers to have an equal level of support, they would need to peg it to the current limit for childcare support.
Stephen Burke

A Fifty-five pounds a week isn't a huge contribution to the cost of childcare. We think the government should up this to £100 a week, and it should apply to any care.
Iain McMath

A Eldercare differs from childcare as does care for a disabled adult. A lot of the caring done is in little bits - taking people to appointments, cooking meals etc. For that sort of care, vouchers are just not appropriate.
Alison Hunt

A If it is an HMRC-backed proposal, where the money gets taken out before tax, we would want to give a warning. The effect on women's pension entitlement in particular is something to watch out for.
Richard Exell

Q Should employers offer their own support?

A If it was left to individual employers, you would get no equality across the board. Childcare vouchers are voluntary, but they quickly became a benefit of choice for companies that want to be seen as progressive. The same would be true of care vouchers if tax exemptions were introduced.
Stephen Burke

A Employers are introducing company-funded support schemes, but the more the government can do to support employers, the greater take-up will be. We need things like flexible working in addition to care vouchers - there is no one answer.
Iain McMath

A Things like employee assistance programmes (EAPs) are important because they provide avenues to talk and share problems. Someone might not know where they can get respite care locally, and this is where an EAP may help. What might also help is homeworking.
Alison Hunt

A The form of childcare that has the biggest take-up is flexible hours. Our preferred social policy is for the NHS to provide services that are free at point of use. There is also a long-term demand from trade unions for childcare on employers' premises, but that is not really transferable to the eldercare debate.
Richard Exell

Q What are the potential drawbacks?

A The arguments against include salary sacrifice not being appropriate for lower-paid staff, but we have always argued that vouchers should be part of a wider support system. There is also the impression that by encouraging people to pay for care through staff benefits, you transfer responsibility to the individual, but fully state-funded care is unlikely to happen.
Stephen Burke

A If you are earning below the minimum wage, then salary sacrifice could impact negatively on you.
Iain McMath

A You have to be careful to make sure pay doesn't fall below minimum wage, and I don't think vouchers would give the flexibility needed. I suspect more people are caring for people long distance, which means you need compressed hours to spend a long weekend with a relative, or you need day-to-day flexibility if you have a relative who needs frequent attention.
Alison Hunt

A There is a question of who qualifies. Childcare vouchers tend to be offered more to staff who are full-time, white-collar, better paid, and more highly-qualified. If there is a 'menu' approach [flexible benefits], then those with caring needs have to forgo benefits that other staff get.
Richard Exell

Q What's the likelihood of care vouchers being introduced?

A There is a question of who qualifies. Childcare vouchers tend to be offered more to staff who are full-time, white-collar, better paid, and more highly-qualified. If there is a 'menu' approach [flexible benefits], then those with caring needs have to forgo benefits that other staff get.
Stephen Burke

A The government is not going to commit to anything until it has sorted out the financial crisis. We've got good support from the Conservatives, but I don't think they would make a formal committment unless they get into office.
Iain McMath

A No comment.
Alison Hunt

A Our preferred social model policy is for the NHS to give services that are free at point of use. We do encourage unions to negotiate for family-friendly provisions, so long as it doesn't lead to people being done out of an important part of normal employee benefits.
Richard Exell

Eldercare facts

According to the report Surviving and Thriving in the Future World of Work, eldercare will replace childcare as the major work-life issue by 2020.

The fastest-growing age group in the UK are those aged 80 and over. This group, which makes up 4.5% of the population, increased by more than 1.1 million between 1981 and 2007. The 2001 Census found there were 4.27 million carers of working age in the UK, and that 66% were also in paid employment.

A Joseph Rowntree Foundation report, The Experiences of Working Carers of Older Adults, found that most carers used annual leave to accommodate caring responsibilities. Two out of three said they spent less than 10 hours a week looking after their care recipient, with shopping, transport, and checking on the care recipient the most common help given.

Case study: BT

BT is one employer backing the Care Vouchers Campaign. It already provides initiatives for carers, including a variety of flexible working arrangements and the Passport scheme - a document created by an employee that explains their caring responsibilities and how it may affect their work. The scheme was created following feedback that staff found it difficult to talk about their needs - especially if this had to be repeated several times to new managers.

Caroline Waters, director of people and policy, says: "We recognise that the need for care will increase. We believe employer-supported adult care schemes will help carers engage with work and improve the quality of life of those being cared for. BT is pleased to support the further development of care vouchers."