Clause 2 - Qualifying childcare

Part of Childcare Payments Bill – in a Public Bill Committee at 10:45 am on 21 October 2014.

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Photo of Lucy Powell Lucy Powell Shadow Minister (Education) 10:45, 21 October 2014

The Opposition have not tabled any amendments, but there are a few grey areas that I hope the Minister will use this opportunity to clarify.

The clause defines what qualifying child care is. The two qualifying criteria are that the child care must be

“registered or approved childcare”,

and

“the main reason, or one of the main reasons, for incurring the costs of the childcare” must be

“to enable the person to work”,

and where they have a partner, the clause specifies that the child care must enable them to work, too. Obviously, we strongly support the principle behind that. On eligibility to qualify for the scheme, the Bill sets out how “work” will be defined for the purpose of the clause. It suggests that “enabling persons to work” will be defined as meeting the minimum income rule.

What steps is the Minister taking to define more clearly “enabling persons to work”, where they might also have a minimum income? For example, if they are in training, to what extent could that be used? They may be in paid work elsewhere, although being paid a small amount, but are in education and training for the other part of the week. Perhaps she will clarify what that means. Looking more closely at the explanatory notes, there is also confusion regarding the suggestion that this will be tested and measured in other ways, other than simply by how much a person earns.

Paragraph 30 of the explanatory notes states:

“This means that a person cannot use the money in their childcare account, which the Government will have topped up, to pay for childcare that enables them to pursue leisure activities. For example, if a person works for one day a week and pursues a hobby for two days a week, they will be able to use the funds in their childcare account to pay for childcare only for their one working day a week. They will not be able to use their childcare account to pay for childcare for the two days a week when they pursue their hobby.”

There will be no other checks to ensure that rule is met. Indeed, the explanatory notes go on to clarify that paying for child care to enable a parent to travel to work will be permissible. Again, this suggests that the Government, or HMRC, will require further proof from parents about whether they meet the minimum income rule and what activities they are undertaking in the rest of their week. Do the Government intend to require parents to prove that they are not using top-up payments to enable them to “pursue leisure activities” and how will they define travelling to work? If not, why is that requirement not made clearer in the draft regulations?  Do the Government intend to introduce further regulations that set out the kind of activities that parents can and cannot pursue while paying for child care? Can the Minister clarify the issue of training and education? I echo the comments made by my hon. Friend the Member for Stockton North about the other reasons that parents might want to claim for childcare. For example they may claim for respite for a disabled child while working on other days, and claim child care for days when they are not in work. That is a grey area and I hope that the Minister will take the opportunity to clarify the issue.