Paying for childcare

Help with your childcare costs

Childcare can be expensive, but there is help available. If you use a registered person or setting, there are a number of options available to you.

Accessing financial help

Below are the different types of government financial support available to help pay for registered childcare and how they work with each other:

Government funding for childcare

Try the Government Childcare Calculator to find out more about the financial support available to help pay for registered childcare.

Discover more about the various financial support available to help fund your childcare.

15 hours’ funded childcare for 3- and 4-year-olds in England

All 3- and 4-year-olds in England and are entitled to 15 hours of early education sessions (funded childcare) a week, up to 570 hours per year.

To take advantage of the 15 hours’ funded childcare, your childcare provider must be registered or approved. Unlike some other government-funded childcare, there is no need to set up an online account to apply for the 15 hours; simply speak with your childcare provider who will provide you with the information you need and any forms you may need to complete.

The funding is available from the term after your child’s 3rd birthday and applies until your child reaches compulsory school age (the term following their 5th birthday).

Child’s birthday

Your child can start their funded place the term after they turn 3

Between 1 January and 31 March

Summer term (April)

Between 1 April and 31 August

Autumn term (September)

Between 1 September and 31 December

Spring term (January)

The stretched offer

Funded childcare is intended to be flexible and you can choose whether to use your 15 hours during term-time only (over 38 weeks) or spread throughout the whole year to include school holidays (‘the stretched offer’). However, you can’t use more than 15 hours per week across fewer weeks in the year. Whether you choose the standard offer or the stretched offer, the maximum number of funded childcare hours per year is 570.

Eligible working families can also claim a further 15 hours’ funded childcare, making a total of 30 hours.

You might hear other names used to describe 15 hours’ funded childcare for 3- and 4-year-olds:

For more information, visit gov.uk/help-with-childcare-costs/free-childcare-and-education-for-2-to-4-year-olds 

Try the Government Childcare Calculator to find out more about the financial support available to help pay for registered childcare.

15 hours’ funded childcare for 2-year-olds in England

Some 2-year-olds are entitled to 15 hours of early education sessions (funded childcare) a week. That’s 570 hours per year.

Who is eligible?
Parents of 2-year-olds will be eligible to receive 15 hours’ funded childcare if you live in England and claim any one of the following:

  • Income Support
  • Income-based Jobseekers Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)
  • Universal Credit – if you and your partner have a combined income from work of less than £15,400 a year after tax
  • Tax credits and you have an annual income of under £16,190 before tax
  • The guaranteed element of State Pension Credit
  • Support through part 6 of the Immigration and Asylum Act
  • The Working Tax Credit 4-week run on (the payment you get when you stop qualifying for Working Tax Credit).

A child will also be able to receive 15 hours’ funded childcare if they:

  • are looked after by the local council
  • have a current statement of special educational needs (SEN) or an Education, Health and Care (EHC) Plan
  • receive a Disability Living Allowance
  • have left care through special guardianship or an adoption or child arrangements order (formerly residence and contact orders).

If you are eligible, the funded childcare (also known as free early education) must be with a registered or approved childcare provider. Funded places start the term after your child’s 2nd birthday.

Will funded childcare for my 2-year-old affect my Tax Credits?

Contact HMRC when taking up a funded early education place if the funding reduces the amount you pay for childcare by £10 or more a week

Find out how to access a funded education place in your local authority by visiting gov.uk/find-free-early-education. You can also ask your local nursery, playgroup, childminder, children’s centre or primary school whether they offer funded places for 2-year-olds

General information about the early learning programme can be found at gov.uk/freechildcare.

You might hear other names used to describe 15 hours’ funded childcare for 2-year-olds:

Try the Government Childcare Calculator to find out more about the financial support available to help pay for registered childcare.

 

30 hours’ funded childcare for 3- and 4-year-olds in England

Whilst all children can receive 15 hours’ funded childcare a week (the universal entitlement), parents need to be eligible to receive the additional 15 hours of funding (extended entitlement).

The aim of 30 hours’ funded childcare is to financially support working families to access high-quality childcare.

You can apply for both the 30 hours and Tax-free Childcare through the government's online Childcare Service. Applying for 30 hours’ funding should take around 20 minutes, but it’s important to register early in case your application takes longer for any reason. You can save and go back to it if you need to.

To register for your eligibility code, you’ll need your details (and your partner’s, if you have one), including your:

  • National Insurance number
  • Unique Taxpayer Reference (UTR), if you’re self-employed

Once you have completed the online form, you’ll receive your eligibility code (if you are eligible for the funding). You may receive your code straight away, but it could take up to seven days. Some users have experienced technical issues, too, so the sooner you apply, the sooner you can rest assured that your child’s funded place is secured. 

To take advantage of the 30 hours’ funded childcare, your childcare provider must be registered/approved [hyperlink to ‘What is registered childcare?’] and you must make your application the term before you wish to start receiving the entitlement.

The 30 hours’ funding is available from the term after your child’s 3rd birthday and applies until your child reaches compulsory school age (the term following their 5th birthday). 

Child’s birthday

You’ll need to give your eligibility code to your childcare provider by

If eligible, your child can start their funded place the term after they turn 3

Between 1 January and 31 March

31 March

Summer term (April)

Between 1 April and 31 August

31 August

Autumn term (September)

Between 1 September and 31 December

31 December

Spring term (January)

Your childcare provider or local authority then validates your code using an Eligibility Checking System.

The stretched offer
Funded childcare is intended to be flexible and you can choose whether to use your 30 hours during term-time only (over 38 weeks) or spread throughout the whole year to include school holidays (‘the stretched offer’). However, you can’t use more than 30 hours per week across fewer weeks in the year. Whether you choose the standard offer or the stretched offer, the maximum number of funded childcare hours per year is 1,140.

Eligibility

You are usually entitled to 30 hours’ funded childcare if you (and your partner, if you have one) are:

  • in work - or getting parental leave, sick leave or annual leave
  • each earning at least the National Minimum Wage or Living Wage for 16 hours a week. This is £125.28 if you’re over 25.

This earnings limit does not apply if you’re self-employed and started your business less than 12 months ago.

You’re not eligible if:

  • your child does not usually live with you
  • either you or your partner has a taxable income over £100,000
  • you’re from outside the EEA (European Economic Area) and your UK residence card says you cannot access public funds.

From September 2018, foster children [hyperlink] will also be able to access the 30 hours’ funding, providing the family meet the criteria above.

You might hear other names used to describe 30 hours’ funded childcare:

For more information, visit gov.uk/help-with-childcare-costs/free-childcare-and-education-for-2-to-4-year-olds 

Try the Government Childcare Calculator to find out more about the financial support available to help pay for registered childcare.

Read more about paying for registered childcare – what’s available? 

More on 30 hours’ funding

Read our spotlight on 30 hours

Find out about how providers are overcoming the challenges of providing 30 hours’ funded childcare 

Read about how the 30 hours’ funding has helped working families

Find out about 30 hours’ funded childcare for children with SEND

Any questions? View our 30 hours parent FAQs 

 

 

Tax-free childcare

Tax-free childcare is designed to help working families to pay for childcare. If you are eligible, you can receive up to £500 every three months (£2000 a year) for each child to help with the cost of registered childcare.

If your child is disabled, you may receive up to £4000 a year until they are 17 years old. They are eligible if they:

  • get a Disability Living Allowance, Personal Independence Payment or Armed Forces Independence Payment
  • are registered as blind or severely sight-impaired.

Tax-free childcare is gradually replacing childcare vouchers and will reach more families, including those who are self-employed. Your childcare provider must be signed up to the scheme before you can benefit from Tax-free childcare.

The eligibility requirements for Tax-free Childcare and the 30 hours’ funded childcare in England are the same, and parents use the same online system to register for both.

To find out whether you are eligible, visit gov.uk/help-with-childcare-costs/tax-free-childcare

You cannot receive Tax-free Childcare at the same time as claiming Working Tax Credit, Child Tax Credit, Universal Credit or childcare vouchers.

To find out more about the financial support available to help with registered childcare, try the Government Childcare Calculator.

How does Tax-free childcare work?

 

Tax Credits

There are two types of Tax Credit available: Child Tax Credit and Working Tax Credit – both of which could help with your childcare costs.

Child Tax Credit
If you have a new baby, or you're responsible for any children aged 16 or under, you could claim Child Tax Credit. You can also qualify if you have children aged 16 to 19, as long as they're in certain types of education or training.

Some handy things to know:

  • You don’t need to be working to claim Child Tax Credit
  • Only one household can get Child Tax Credit for a child
  • Child Tax Credit won’t affect your Child Benefit.

How much could you receive?

Maximum Child Tax Credit rates for 2018 – 2019

Child Tax Credit Family Element

£545

Child Element

£2,780

Disabled Child Element

£3,275

Severely Disabled Child Element

£1,325

Working Tax Credit

Working Tax Credit is to support people on a low income. If you’re working or about to start a new job, you may be eligible to claim the childcare element of Working Tax Credit. To be able to do this, you need to use registered or approved childcare. You can’t claim the childcare element of Working Tax Credit if your childcare is provided by a relative of the child in your own home.

How much could you receive?

Maximum 2018 – 2019 rates for the childcare element of Working Tax Credit

Maximum you could receive for one child

£175

Maximum you could receive for two or more children

£300

Maximum percentage of your childcare costs covered

70%

Universal Credit 

Child Tax Credit and Working Tax Credit are gradually being replaced by Universal Credit. Visit universalcreditinfo.net to check if you live in a Universal Credit area.

Useful links

Find out more about Tax Credit rates.

For more information on Child Tax Credit, visit gov.uk/child-tax-credit.

For more information on Working Tax Credit, visit gov.uk/working-tax-credit.

To find out more about Universal Credit, visit gov.uk/universal-credit.

To find out more about the financial support available to help with registered childcare, try the Government Childcare Calculator.

Read more about paying for registered childcare – what’s available?

 

Childcare vouchers

Many employers offer their staff childcare vouchers via ‘salary sacrifice’. Neither you nor the employer will pay tax or National Insurance contributions on the first proportion, so you can save a significant amount each year, making it a very cost-effective way to pay for childcare.

To take advantage of childcare vouchers, you need to use registered or approved childcare. The vouchers can pay towards the care of children up to the age of 15, or 16 if they are disabled.

Tax-free Childcare is gradually replacing childcare vouchers. From October 2018, childcare vouchers will be closed to new applicants. The childcare voucher scheme was due to close to new applicants in April 2018, however this was extended to October.

You can keep using childcare vouchers if you’ve joined a scheme and get your first voucher before the scheme closes in October 2018, as long as:

  • you stay with the same employer and they continue to run the scheme
  • you don’t take an unpaid career break of longer than a year.

You can’t use childcare vouchers and Tax-free Childcare together.

The amount that you can receive through childcare vouchers depends on when you joined the scheme. For those who joined before 6 April 2011, the maximum amount per month is £243. For those who joined the scheme after 6 April 2011, the amount you receive depends on your rate of Income Tax.

To find out more about childcare vouchers, visit gov.uk/help-with-childcare-costs/childcare-vouchers.

To find out more about the financial support available to help with registered childcare, try the Government Childcare Calculator

Read more about paying for registered childcare – what’s available?.

 

 

Universal Credit

Universal Credit (UC) is a single payment for people who are looking for work or receive a low income.

UC is gradually replacing the following:

  • Child Tax Credit
  • Working Tax Credit
  • Housing Benefit
  • Income Support
  • Income-based Job Seeker’s Allowance
  • Income-related Employment Support Allowance

UC operates using an online system and instead of varied payments for different benefits, claimants receive one monthly payment.

The move to a single, monthly payment reflects the world of work, where 75% of all employees receive wages monthly.

If you’re eligible for Universal Credit, you may be able to claim back up to 85% of your childcare costs.

You (and your partner if you live with them) will usually need to either:

  • be working – it doesn’t matter how many hours you or your partner work
  • have a job offer.

How much could I receive?

Maximum you could receive for childcare costs through Universal Credit

Maximum for one child

£646

Maximum for two or more children

£1108

Universal Credit is being introduced in stages by postcode area. Visit universalcreditinfo.net to check whether the full Universal Credit service is available in your area.

To find out more, visit gov.uk/universal-credit and gov.uk/guidance/jobcentres-where-you-can-claim-universal-credit.

Try the Government Childcare Calculator to find out more about the financial support available to help pay for registered childcare.

Read more about paying for registered childcare – what’s available?

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