§ Caroline FlintTo ask the Chancellor of the Exchequer what plans he has to allow parents to claim under working families tax credit for extra costs to child care when the extra costs run for less than four consecutive weeks. [95864]
§ Dawn PrimaroloThe child care tax credit within the working families tax credit provides support to families for the costs of registered or approved child care. Once an award of working families tax credit is made, it cannot be adjusted to reflect changes in the claimant's child care costs. However, from April 2003, working families tax credit is replaced by the new child tax credit and working tax credit. The working tax credit includes a child care element which provides more flexible support for the costs of child care. In particular, the child care element of working tax credit can be adjusted to reflect significant changes in average weekly child care costs.
In response to concerns raised with me by parents paying child care costs weekly, who may have short increases in child care costs during the school holidays, we will shortly bring forward regulations making a minor change to the system to allow parents to take account of changes in costs lasting less than four weeks. This will allow parents with fluctuating child care costs to have their tax credit based on their average child care costs, including any short-term fluctuations. It is our intention to produce this addition to the rules in good time for the start of the new tax credits system in April 2003. The Inland Revenue will issue clear guidance for parents and child care providers on how the system will work from April 2003.