Employer Supported Childcare (ESC)

The Childcare Vouchers scheme currently in place is due to be replaced by the tax free childcare scheme from Autumn 2015.

The new scheme will eventually be worth up to £1,200 per child and so save a typical working family with two children under 12 up to £2,400 per year.

Initially the scheme will be open to children under 5 building over time to include those under 12.

Eligibility criteria

  • Both parents in work
  • Each earning less than £150,000 per annum
  • Not already receiving support through tax credits / universal credit

The changes

ESC will continue for members if they wish to remain within the old scheme. New claimants will get support through the new scheme. ESC is currently only offered by less than 5% of employers and used by 450,000 families.

Eligible ESC recipients may choose to move to the new scheme but are not able to receive both.

The new scheme for a family with 2 children will be worth more than double the amount of a single claim for ESC and will be available to 5 times as many families.

For parents currently receiving support through child tax credits and in due course universal credit an additional £200m of support will be provided within the UK to improve work incentives for full time hours for low and middle income families effectively covering 85% of childcare costs.