Are you looking for financial help with the cost of childcare?
If you are a parent of a three to five year old, most nurseries in England provide funded places as part of the Government’s Free Nursery Education scheme, and many have the option for you to take up additional childcare outside of this, making it an ideal childcare option. There is also a range of financial support available to help with the cost of childcare. We have outlined some of the key options below:
childcare vouchers
Employers are increasingly offering support for childcare through childcare voucher schemes. This is a salary sacrifice system of up to £55 per week per parent. The money comes directly off your salary before deductions, giving you savings on tax and National Insurance contributions.
In return, you will be given a voucher or e-voucher that is given to your nursery and is deducted from your bill. A number of childcare voucher providers offer this service to companies, and some now have online systems. You should ask your employer if this is a benefit they offer.
If you receive tax credits the amount you are eligible for may be affected by using childcare vouchers. You can check whether you would be better off taking childcare vouchers through this free online calculator www.hmrc.gov.uk/calcs/ccin.htm
Parents in Scotland, click here for more information on childcare vouchers.
Change to childcare vouchers from April 2011 - if you join your employers scheme on or after 6 April 2011, then the amount of tax you receive will be limited to the equivalent of the basic rate. Visit HMRC for more information
free nursery education (England only)
If your child is aged between three and five, then you are entitled to 15 hours of free nursery education for 38 weeks of the year in the term following their third birthday. This means your three, four or five year old can go to nursery for 15 hours a week (for 38 weeks) free of charge. You don't need to make any payment for these hours or get a voucher or grant!
Many nurseries offer this service, so ask your local nurseries if they offer 'free nursery education'. You can look for nurseries that are members of National Day Nurseries Association (NDNA) through our find a nursery section. Your local authority will also have a list of nurseries registered to provide free nursery education so give them a call or visit their websites.
Your child's nursery will be able to discuss with you the length of sessions and days they are able to offer. You can read our factsheet about free nursery education for more information.
If you are in Wales ask your local authority for a list of providers that offer Foundation Phase sessions. In Scotland, you can also receive free early education through a pre-school place. Your local council will be able to advise where you can access a free place.
check if you qualify for tax credits
Many families do not take advantage of the financial help that is available to them for things such as the cost of childcare. Families on middle as well as low incomes may be entitled to financial support such as Child Tax Credit or Working Tax Credit.
Find out more about tax credits and fill out a short online questionnaire to see if you qualify at: www.hmrc.gov.uk/TAXCREDITS/start/who-qualifies/index.htm
the childcare element of working tax credits
This extra help - called 'the childcare element of working tax credits' - is available to individuals on lower incomes to help with the cost of childcare. The amount received is dependent on your circumstances and income, but it could cover up to 70% of your childcare costs when you use a formal childcare provider such as a nursery. The nursery must be registered with Ofsted or the equivalent regulatory body in Scotland or Wales.
To be eligible, lone parents must work 16 hours or more per week, for couples, both partners must work 16 hours or more or one partner must work 16 hours or more per week if the other is unable to work for specific reasons.
To find out more and if you are eligible for assistance, visit http://www.hmrc.gov.uk/taxcredits/start/who-qualifies/children/childcare-costs.htm or call the Tax Credit helpline on 0845 300 3900.
help with childcare costs for teenage parents
Care to Learn provides financial support to teenage parents who want to continue their education and need help with the cost of childcare. The scheme will pay up to £160 a week (£175 in London) and all payments are made directly to the childcare provider - such as the nursery.
For more information about Care to Learn visit: http://caretolearn.ypla.gov.uk
help with childcare costs for students
Full-time higher education students with chidlren in registered childcare could receive financial support for childcare costs - the Childcare Grant. This could support up to 85% of the cost of childcare, dependent on a number of factors.
Visit the direct.gov website for more information on the Childcare Grant.
additional financial help for low income families
Childcare support is available for low income families. Click here for more information.
