My Lords, I shall also speak to Amendments 8, 9, and 10, which concern eligibility for the extended entitlement.
The additional childcare provided for in the Bill builds on the existing entitlement to 15 hours of early education for three to four year-olds and disadvantaged two year-olds. The Government’s intention with this extended entitlement is to support working parents with the cost of childcare and to enable them, should they wish to do so, to return to work or to work more.
I will first address Amendment 10, tabled by the noble Baronesses, Lady Pinnock and Lady Tyler. While I understand that the noble Baronesses would like working parents of children aged between one and two to benefit from additional childcare, I can assure them that there is already a significant amount of support for parents of children in this age group. In the last Parliament we introduced the entitlement to 15 hours free childcare for disadvantaged two year-olds. We have legislated for tax-free childcare, which will save around 1.8 million working families with children under the age of 12 up to £2,000 per child per year. We have committed to increasing childcare support within universal credit by around £350 million, to provide 85% of childcare costs from next year, rather than the current 70%, where a lone parent or both parents in a couple are in work. The Government’s clear commitment is to increase the hours of free childcare available to working parents of three and four year-old children, when many parents feel more able to return to work.
Turning to those children that the Government intend to benefit from the new entitlement, our intention is that the criteria for accessing the entitlement will include conditions relating to paid work undertaken by the child’s parent or the parent’s partner. The criteria will be set out in regulations, rather than in the Bill, but our intentions are clearly signalled by Amendments 7 and 8. As set out in Committee, the amount of work parents will need to undertake will be set relatively low. Children of parents who earn at least the equivalent of eight hours per week at the national minimum wage, including those who are self-employed, will qualify for the extended entitlement. In the case of lone-parent households, the same threshold will apply. That makes this a significant offer of additional support.
We have considered carefully the debate in Committee about parents who may not be in a position to meet the minimum income threshold, for reasons which may be connected with incapacity for work, caring responsibilities or because they are temporarily away from the workplace. That is why the Government’s policy statement, published at the beginning of this month, set out further information on the circumstances in which we think that children of such parents should nevertheless qualify. The amendment we have brought forward would enable the Government to specify the circumstances in which a person should be regarded as in paid work for the purposes of the new entitlement. This would enable the Government to include, within regulations, those parents who are out of work or temporarily away from the workplace.
In summary, the Government intend that the additional entitlement should be available in the following circumstances: where both parents are employed but one or both parents is temporarily away from the
workplace on parental, maternity or paternity leave; where both parents are employed but one or both parents is temporarily away from the workplace on adoption leave; where both parents are employed but one or both parents is temporarily away from the workplace on statutory sick pay; where one parent is employed and one parent has substantial caring responsibilities, based on specific benefits received for caring; or, finally, where one parent is employed and one parent is disabled or incapacitated, based on receipt of specific benefits. The Government believe that including parents who meet these criteria within the entitlement provides an appropriate balance in supporting parents to work where they can do so but also avoiding undue disruption to providers and children due to short periods of parental absence outside the workplace. I hope noble Lords will welcome the Government’s intention to include these circumstances in the eligibility criteria for the extended entitlement, which includes a number of groups specified in Amendment 9 tabled by the noble Baroness, Lady Jones, and the noble Lord, Lord Touhig.
Turning to parents on zero-hours contracts, as mentioned in the Opposition’s Amendment 9, we recognise that the system needs to reflect the variety of working patterns of families across England. I should therefore like to reassure all noble Lords that the contractual position of parents will not determine whether they are eligible for the additional childcare. Parents on zero-hours contracts will be eligible in the same way as anyone else if, on average, they earn at least eight times the minimum wage per week as determined by information held by HMRC on parental earnings.
For parents who are not in work but are undertaking work-related training, in addition to the existing entitlement for three and four year-olds the Government already provide support to help with the costs of childcare to parents in recognised education courses. This includes schemes such as the childcare grant which offers parents support of up to 85% of their childcare costs depending on their household income. We believe that that is already a significant contribution to childcare costs while a parent is studying. Children whose parents are students but who are also in work will qualify for the extended entitlement in the same way as any other parent, as long as they meet the eligibility criteria. I would also like to mention very specifically here that parents on an apprenticeship, who by definition will be working full time, will be able to benefit from the extended entitlement.
As I have already explained, it is our intention that where one parent receives benefits for undertaking caring responsibilities, in the case of couple families they will be regarded as if they were in paid work as long as the other parent is working. This will mean that in such families they will be able to receive the additional entitlement supporting the other parent to remain in work or extend their hours of work. The entitlement is intended to help parents work. In the case of single-parent carers, should they work in addition to their caring responsibilities, they will be entitled to the additional childcare, like other parents.
I should also like to reassure the noble Baroness, Lady Jones, and noble Lord, Lord Touhig, that it is not our intention that children of parents who lose
their job unexpectedly should be disadvantaged. If a parent’s circumstances change their child will remain eligible for the extended free entitlement for a short period. We hope that within this time the parent will be able to regain employment and continue to declare that they expect to meet the criteria that I have just set out. If that is not the case, and after the grace period the parent is clear that they no longer expect to be in paid employment, they would become ineligible. We expect to provide further detail on how this will work in regulations and statutory guidance but a common-sense approach would be for children to keep their place for the remainder of that term.
The Government recognise the importance of volunteering and the role that volunteers play in improving their local community. However, the purpose of the extended entitlement is to help parents go out to work if they want to. As I have explained, entitlement is based on working the equivalent of eight hours, which means that parents who work part time and wish to combine this with some voluntary work will, of course, be able to do so.
Today, and in our policy statement, we have aimed to set out who the Government intend to benefit from the extended entitlement, but I am aware that noble Lords may question why we do not intend to set this level of detail out in primary legislation. As explained, eligibility will broadly align with that for tax-free childcare. The Childcare Payments Act 2014, which established tax-free childcare, sets out general conditions of eligibility, including the need to be in qualifying paid work. However, it is secondary legislation which sets out what is meant by qualifying paid work and when a person is to be regarded as being in such work. Those regulations are obviously highly technical, cross-referring to benefits, allowances and credits established under a number of pieces of primary legislation. Similarly, the approach that the Government have taken in this Bill is to signal in primary legislation that parents will be expected to meet conditions as to paid work in order for their children to qualify.
By taking a power to specify in regulations the circumstances in which a person is to be regarded as in such work, we have also signalled a clear intent to cater for circumstances in which a parent does not meet the paid-work condition, for example because they are temporarily away from the workplace due to sickness or parenting responsibilities, but their child ought nevertheless to qualify. However, we think it is appropriate that the technical detail as to which allowances will mean that a parent can continue to be regarded as being in paid work ought to be left to secondary legislation, and we feel that this strikes the right balance. This will also mirror the approach taken to the entitlement to 15 hours of free childcare for certain eligible two year-olds, where the detail as to which children are eligible is set out in regulations. The secondary legislation for the new entitlement will be laid and approved by each House using the affirmative procedure on their first use, therefore providing the opportunity for debate in both Houses.
I hope noble Lords will recognise that the Government have given careful consideration to the question of eligibility and, through their own amendments, have
addressed the key issues raised in Committee and provided a clear explanation for why some groups mentioned by the noble Baroness and the noble Lord may not be eligible. I therefore urge the noble Lords not to press their amendments and I commend Amendments 7 and 8.
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