Parents due compensation over childcare technical glitches

'Too little, too late' attempt by HMRC to support 30 hours claimants results in payout

Hands up if you're having problems with the Childcare Service (Getty)

Summer holidays are over, the older kids are back to school and across the UK parents of younger children are preparing to send them to nursery.

This September is the first time that parents will begin to qualify for the 30 state-funded term-time hours. Many parents will also now be accessing the tax-free childcare system, which is worth about £2,000 per child per year.

Unfortunately, for some parents the relief of the additional help is being sharply tempered by trouble accessing it. The Childcare Service website run by HM Revenue & Customers has been plagued by technical issues since its launch in April. It has meant that some parents have been unable to sign up for a tax-free account, while others have been unable to process their applications or have been locked out of their accounts.

John Thompson, chief executive at HMRC, has apologised to affected parents and said that the service is on track to meet its target of 200,000 successful applications for the 30 hours by the end of August.

He also revealed that more than £45,000 has already been paid out in compensation to parents in lieu of help that they were unable to receive.

Now, finally, parents who have been affected by the problems can apply for compensation for financial losses resulting from the issues.

Who can get help?

Those affected will be able to apply for a one-off payment to reflect the tax-free childcare they have missed out on.

HMRC stated that it would consider refunding any reasonable costs directly caused by the service not working as it should.

Such costs are likely to include late payment charges and overdraft charges that parents can prove they incurred as a direct result of the issues.

To qualify, parents must have been unable to complete their application for tax-free childcare, have been unable to access their account or to have been left without a decision on eligibility for more than 20 days.

Fortunately the vast majority of parents have been unaffected. Thompson’s response to the Treasury Committee revealed that less than 5% of customers have experienced issues and fewer than 1% have complained.

However, the website MoneySavingExpert says that equates to at least 12,000 people, although HMRC has not provided exact figures.

Unhappy customers

The response from childcare providers has been scathing. Neil Leitch, chief executive at the Pre-School Learning Alliance, commented: “We recognise that HMRC are working hard to rectify the problems with the website, but the fact remains that thousands of parents and childcare providers have been adversely affected by these glitches.

“It really is a case of too little, too late. Both 30 hours ‘free childcare’ and tax-free childcare were key Conservative manifesto promises, which the government seem wholly unprepared to deliver.

“The very least we expected was investment in an IT system that parents are able to use, and through which providers are able to receive the payments that their businesses rely on.”

“It’s caused real problems for at least one of our parents that I know of,” agrees Claire, the manager of a nursery and pre-school in the north-west. Given the sensitive nature of the topic she has agreed to speak frankly as long as we do not reveal the name of the childcare setting she runs.

“It’s very obvious that childcare is a big bill for mums and dads…In the last couple of years we have seen a rise in the number of parents who fall behind with their bills.

“They were incredibly relieved about the extra funded hours for three and four-year-olds. We have quite a few self-employed mums and dads too so [they were] happy they could finally get some help with the tax-free childcare.

“The technical issues have not just got parents worried and upset, they have damaged their confidence in the system. We’ve told all our customers about the compensation, I just hope anyone affected actually asks for it.”

Not all parents of pre-schoolers will qualify for the extra hours. All three and four-year-olds are eligible for the 15 funded term-time hours, however, for the additional hours both parents must be working at least 16 hours a week – or one parent in a single-adult family.

Each parent must earn less than £100,000 and live in England. In Scotland the funded hours are capped at 16 hours a week and in Wales parents receive 10 hours of funded care, although this is under review.

Looming deadlines

The Childcare Services website is likely to have come under even greater strain this week. The deadline for qualifying parents to apply for their 30 funded hours was Thursday 31st August and there was an expected rush to secure funding in time for the new term.

And these technical issues are not the only reason the childcare roll-out has been controversial. The Pre-School Learning Alliance estimates there is a 20% shortfall between the government funding for the 30 hours and the actual cost to nurseries.

It claims that some nurseries may have to close down if they are unable to manage the funded hours. The state has increased the amount it pays and promised further funding, however, the debate still rages about whether the scheme is affordable for nurseries.

Concerns over technical issues risk adding to sense that the scheme has not been sufficiently planned or provided for.

Claire adds bluntly: “As a service provider we’re stretched really thin as it is. At [my nursery] we just can’t let parents delay payment if they are affected, we wouldn’t be able to afford to even though we know it’s going to be sorted in the end.

“This is…another kick for parents just when they thought they were finally getting real help.”

If you believe you will qualify for compensation or want more information then visit the official webpage here.