Middle class gaining most from child care subsidies

Higher income families are taking up a disproportionate share of
subsidised child care, a new study has revealed.

Families living on lower incomes are much more likely to rely on
more informal services, including nannies, friends and family,
which are not eligible for subsidy even when parents have to pay
for them.

The research, published by the Department for Work and Pensions,
surveyed more than 8,000 families and found that 57 per cent of
pre-school children and 12 per cent of school-age children with
parents who worked at managerial or professional type jobs were
placed in eligible forms of child care, compared to 22 per cent and
3 per cent respectively of children whose parents worked in manual

Thirty-nine per cent of mothers who were working full time were
paying for child care. Of these, just under a third were relying
on, and paying for care which was not eligible for the childcare
tax credit.

The report says: “This finding presents a challenge to
policies which aim to increase eligible child care placements for
lower income working families with the added incentive of a tax
credit. It appears that those forms of child care which qualify for
support from the government are disproportionately being taken up
by families who do not necessarily qualify for the childcare tax

– Families and Children 2001: Work and Childcare, by Diana
Kasparova, Alan Marsh, Sandra Vegeris and Jane Perry. Summary
available at www.dwp.gov.uk/asd/asd5/191summ.pdf

– Families and Children 2001: Living Standards and the children
by Sandra Vegeris and Jane Perry. Summary available at www.dwp.gov.uk/asd/asd5/190summ.pdf

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