The cost of childcare can eat up a large chunk of the family budget. Fortunately, there’s plenty of help available from the government and employers - from tax credits and tax-free childcare to free childcare.
The following information provides sources of help with childcare costs. Only general information is given, as eligibility depends on circumstances and income. Parents therefore need to liaise with the contacts given to receive more detailed information on accessing this financial help.
You will also find: links to calculators to work out how much you may save and who to speak to for further help
Find out if your 2 year old is eligible to receive 15 hours of free childcare/early learning per week, 38 weeks per year.
All 3 and 4 year old children are entitled receive 15 hours of free childcare/early education per week, 38 weeks per year.
Find out here if your 3/4 year old is eligible to an extra 15 hours a week of flexible free childcare entitling them to 30 hours a week for at least 38 weeks a year
Tax-Free Childcare allows parents to pay into an online childcare account and receive a government top-up. The funds in the account can then be used to pay for registered childcare providers who have signed up to the scheme.
Find out more information on how it works, eligibility and signing up here:
There are currently three types of childcare support that your employer could provide which qualify for Income Tax and National Insurance contributions (NICs) exemptions.
1) Childcare Vouchers
Childcare Vouchers are offered by some employers to help employees with childcare costs. This is known as a Salary Sacrifice Scheme run by your employer or the voucher company. You can use these vouchers to pay your Ofsted registered childcare provider. The savings you get depend on your tax band. Some popular childcare voucher providers your employer may use include:
If you are already receiving tax credits and want to know whether you would be better off with childcare vouchers, this online calculator will compare the options.
Please note: The childcare voucher scheme, is due to close to new entrants from 4 October 2018.
2) Directly Contracted Childcare
Directly Contracted Childcare is where your employer arranges with a commercial childcare provider to provide childcare to you. Your employer may provide emergency childcare cover or pay for a place:
- in a nursery
- in a crèche
- in a playscheme
- in an after school club
- with a registered childcare provider or other approved childcarer
3) Workplace Nurseries
Some employers set up their own nursery, either at your place of work or at
Your employer decides how much you pay for access to a workplace nursery. But
whether it’s free or subsidised, it counts as a tax-free perk of your job.
Speak to your employer to find out if they offer a workplace nursery.
Not all employers offer this assistance but, if they do, the amount you save with an
employer-supported childcare scheme depends on:
- the type of scheme your employer offers
- whether this is offered instead of your salary (salary sacrifice) or in addition to your salary (salary plus)
- the rate of Tax and National Insurance contributions on your salary
For further information speak to your employer
If you are entitled to Working Tax Credit and you and any partner are working at least 16 hours a week each, you can claim back up to 70% of your eligible childcare costs. Tax credits for childcare are intended to help working parents on a low income with the costs of registered childcare.
To be eligible for the childcare element of Working Tax Credit, you:
- Must be in paid work of 16 or more hours a week. If you have a partner, you must both be in work for 16 or more hours per week; or one of you must work 16 hours and the other is incapacitated, in hospital, in prison or entitled to carer’s allowance.
- You must have main caring responsibility for your child/children; and you can claim for them up to the first Saturday in September following their 15th birthday – or their 16th if they are disabled or registered blind.
- You must use registered childcare.
How much you get will depend on:
- your income
- the hours you work
- your childcare costs
You can check what you’re entitled to, and make a claim for the childcare element of Working Tax Credit, by calling the tax credit helpline on 0345 300 3900.
Universal Credit is being phased in over the next few years. It will replace a number of existing benefits, including tax credits. If you are already receiving tax credits, you don’t need to do anything now.
For further information and to apply visit Childcare Choices
Universal Credit is gradually being introduced to replace certain benefits. You may be able to claim Universal Credit instead of certain benefits if you’re on a low income, including help with your childcare costs. Parents claiming Universal Credit can get support with their childcare costs to help them move into work and increase their hours.
You can claim up to 85% of your paid out childcare costs.
Universal Credit will replace the following:
- Income-based Jobseeker’s Allowance
- Housing Benefit
- Working Tax Credit
- Child Tax Credit
- Income-related Employment and Support Allowance
- Income Support
If you’re already claiming benefits, your local Jobcentre Plus or Tax Credits office will tell you when you have to move to Universal Credit.
Universal Credit is being introduced in stages. When you can claim depends on where you live and your personal circumstances.
You don’t need to do anything if you’re already claiming any benefits – you’ll be told when Universal Credit will affect you.
To be able to claim Universal Credit you’ll have to sign a ‘Claimant Commitment’. This is an agreement that you’ll undertake work related tasks; being a parent, with responsibilities at home, will be taken into account.
For more details visit the GOV.UK website or contact the Universal Credit helpline on 0800 328 9344.
Just because you’ve had a baby, you don’t have to put your studies on hold. Whether you’re at school, college or university, you could qualify for financial help to cover anything from living expenses and learning costs, to travel and childcare.
Care to Learn
If you’re under 20 and caring for your own child you may be eligible for Care to Learn. Payments go direct to your childcare provider to pay for childcare costs.
If you’re in full-time higher education and have a child under 15 years of age or under 17 if they have special needs then you can apply for a Childcare Grant to pay for your childcare costs
Parents Learning Allowance
If you're are a full time student with children you may be eligible for help with your learning costs through Parents Learning Allowance. How much you get will depend on your households income.
Discretionary Learner Support
If you’re 20 or over and on a further education course you may be able to get Discretionary Learner Support to pay for your childcare. Each college has its own scheme so contact your college for more information
Childcare provided by a relative of the child, in the child's own home does not class as qualifying childcare. This includes relatives by blood, half blood, marriage or civil partnership who are registered or approved childcare providers. For these purposes a relative means a:
- step parent
- foster parent
- aunt or uncle
- brother or sister
Childcare provided by relatives can be qualifying childcare if all the following circumstances apply:
- the relative is a registered or approved childcare provider
- the care is provided away from the child's own home
- the care is provided to nonrelated children in addition to the related child or children