Published Tuesday, 19 March 2013
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In families where all adults work, they could be in line for a payout of up to £1,200 or 20% of their annual costs, but only if neither parent earns more than £150,000 a year.
The scheme will come into effect in late 2015, and for low or middle-income families who are claiming tax credits they will remain on a separate programme until a year later.
Across the UK, up to 1.3m families will benefit from the new plans - compared with 450,000 under the current employer-support childcare voucher system.
Prime Minister David Cameron said the plans would be a "a real help to people who want to go out to work" and need childcare.
"Too many families find paying for childcare tough and are often stopped from working the hours they'd like," he said.
"This is a boost direct to the pockets of hard-working families in what will be one of the biggest measures ever introduced to help parents with childcare costs."
Early Years works to promote high quality childcare for children in Northern Ireland.
Chief Executive Siobhan Fitzpatrick said they are delighted with the announcement, but believe extra measures could further help families in the region.
"Young parents with young children need support with child care costs now, indeed many parents are paying as much as a mortgage in terms of child care, and for some parents work is not just paying," she explained.
The organisation said they also would like to see more hope for the unemployed or those in low income families.
"We were doing some of the sums today, the bigger your income the better the support is," explained Siobhan.
"The more children you have the better this support is. We need to see a variety of support measures for child care - we need support tax care, tax credit support but we also need supply side support."
Meanwhile Labour warned that a couple with one child paying basic rate income tax will lose £600 compared with the existing scheme.
"The Government will be cutting £7bn worth of support for families in 2015 - ten times what they are promising in today's announcement," said shadow education secretary Stephen Twigg.
"Lower and middle income earners are being hit hard. Parents who get tax credits and have already seen their income squeezed will not benefit from this tax break."
Chancellor George Osborne will unveil his Budget on Wednesday.