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A Quick Guide to Childcare Funding Options in England

A Quick Guide to Childcare Funding Options in England
We explain the various childcare funding schemes in England, including an at-a-glance overview of what's available, eligibility and how to apply.One of the first challenges when considering childcare for your little one is how to fund it. If you’re an affluent family, then great. However, if childcare costs will be a more significant hurdle to overcome, the good news is that there are lots of options available. Either way, it will help to be well-informed about the various childcare funding schemes on offer from the Government. There are quite a few of them and some are extremely generous and surprisingly easy to obtain. Today’s Quick Guide to Childcare Funding Options in England will give you an at-a-glance overview of what’s available, the key eligibility criteria and how to apply. Note, though, that they generally fund in-person childcare only from approved providers (like Little Acorns). Take a look at the many options …

Childcare Vouchers:

What are childcare 'vouchers' and how do you get them? We explain.You’ve no doubt heard of, or read about, childcare ‘vouchers’. They sound great, but what are they and how do you get them?

How To Get Childcare Vouchers

For those who are eligible, Childcare Vouchers are available through employers who participate in the ‘Employer-Supported Childcare’ scheme. In effect, it’s a salary sacrifice scheme, but with tax and National Insurance savings.

How Much Funding Can You Get?

Up to £55 of your earnings can be paid into the childcare scheme each week and the benefit is that the payments are free of income tax and National Insurance. If you’re eligible, your childcare costs you less, in effect.

Eligibility

Childcare Vouchers are not so widely available as they used to be because the scheme has closed to new applicants. However, they’re still available to those who enrolled before the 4th of October 2018. Your children must be no more than 15 (16 if disabled) and how much you are eligible for will depend on when you joined the scheme and how much you earn. They cannot be claimed if you are claiming Tax-Free Childcare (see below).

Find out more about Childcare Vouchers here.

Tax-Free Childcare:

Tax-Free Childcare is widely available to working families — even for those with relatively high earnings.Tax-Free Childcare is a great scheme which, in contrast to childcare vouchers, is widely available to working families — even for those with relatively high earnings.

How Much Funding Can You Get?

If eligible, you can get as much as £2,000 in free childcare funding for each child under 12, every year, or potentially twice that if they’re disabled and under 17.

How To Get Tax-Free Childcare

If eligible, you will need an online Childcare Account which you, or others on your behalf, deposit into. You’ll need to deposit 80% of the eligible childcare costs and the Government will top up the remaining 20%. The funds can then be drawn down by your childcare provider.

Eligibility Essentials

So long as working parents are earning at least £152 per week (lower if under 23), they can be earning up to £100,000 and still remain eligible for Tax-Free Childcare, even if their partner also earns up to that amount. You must not already be claiming certain benefits, a childcare bursary, nor Childcare Vouchers. Other caveats also apply.

More Information about Tax-Free Childcare is available here.

Free Childcare Hours for 2-Year-Olds:

Eligible 2-year-olds can get 15 hours of free childcare per week (570 per year).Certain 2-year-olds are eligible for 15 hours of free childcare each week, through another Government scheme. This one is to help primarily those families on benefits.

How Much Funding Can You Get?

Eligible 2-year-olds can get 570 free childcare ‘hours’ per year. This is usually taken as 15 hours per week spread over 38 weeks of the year. However, some childcare settings allow a more flexible pattern. For example, they could be taken as less hours per week for more weeks of the year, or the reverse of that.

Eligibility Essentials

Rules around eligibility are strict and essentially require you (the parent/guardian) to be in receipt of certain Government benefits or the child to fall into an ‘additional needs’ category. Children can still be eligible, for example, if they are being cared for by the local authority, are subject to an Education, Health and Care (ECH) Plan, have left care under some types of order or are not citizens of the UK but fall into a certain category.

How To Get Free Childcare for 2-Year-Olds

Free childcare hours for 2-year-olds can be accessed via your local council or through your childcare provider. Let us know if that’s us and we’ll be happy to help you access the free childcare funding.

More Information is available here.
[UPDATE MARCH 2023: See our post about funding planned for children from the age of just 9 months following the Spring Budget 2023 here].

Free Childcare Hours for 3 & 4-Year-Olds:

Children aged between 3 and 4 who live in England can get 15 hours of free childcare each week, possibly up to 30 hours in some circumstances.3 and 4-year-olds in England are very well catered for when it comes to free childcare funding. This is aimed to help them receive that all-important early years education and to help those parents wishing to return to the workplace.

How Much Funding Can You Get?

All children aged between 3 and 4 who live in England can get at least 15 hours of free childcare each week, possibly up to 30 hours in some circumstances. It’s a very generous Government scheme resulting in between 570 and 1140 free childcare hours, per child, per year. It’s usually taken over 38 weeks of the year but some childcare settings allow a more flexible spread.

Eligibility Essentials

All 3 and 4-year-olds living in England are eligible for the 15 hours scheme and it’s not means tested.

For the top-up to 30 hours per week, however, eligibility is affected by household income. You and your partner, if you have one, must earn at least £152 per week (lower if under 23) but less than £100,000 per annum. If eligible, though, you are usually also eligible for Tax-Free Childcare (or Childcare Vouchers) or childcare funding through Universal Credit. Other caveats also apply, but these are the main ones.

How To Get Free Childcare for 3 & 4-Year-Olds

The ‘15 hours’ scheme for 3 & 4-year-olds can be accessed via your local council or through your childcare provider. (Let us know if that’s us and we’ll be happy to help with your application). For the ‘30 hours’ scheme, apply here.

More Information about both schemes is available here.
[UPDATE MARCH 2023: See our post about funding planned for children from the age of just 9 months following the Spring Budget 2023 here].

Tax Credits for Childcare:

Eligibility Essentials

Tax Credits for childcare are only available to existing claimants. New applications should instead be through Universal Credit.Tax Credits specifically for childcare are only available to existing claimants under the scheme, through ‘Working Tax Credits’. New claimants should instead refer to the ‘Childcare Funding through Universal Credit’ section below.

How Much Funding Can You Get?

If you’re eligible, you can reclaim as much as 70% of eligible childcare costs — up to £122.50 per week if you have one child, or it’s £210 if you have more than one.

How To Get Tax Credits for Childcare

Existing claimants in receipt of Working Tax Credits for childcare receive the funding direct to their bank/building society account. This is effectively a repayment of the eligible childcare costs already incurred.

More Information is available here

Childcare Funding through Universal Credit:

How Much Funding Can You Get?

Childcare funding through Universal Credit is quite a generous scheme that allows eligible families to reclaim up to 85% of their childcare costs.For those who are eligible, this is quite a generous scheme that allows them to reclaim* as much as 85% of their childcare costs. The maximum available, however, is £646.35* each month for one child, or it’s £1108.04* for more than one.
* [UPDATE MARCH 2023: See our post about the increases and improvements to this scheme following the Spring Budget 2023 here].

Eligibility Essentials

You/your partner (if applicable) need to be working, claiming Universal Credit and claiming for a child under 17. Other caveats apply. Note that you cannot claim this funding if you’re already claiming for childcare funding through Tax Credits nor through the Tax-Free Childcare scheme. Your earnings and the amount of any savings and/or investments may also affect your claim.

How To Get Childcare Funding via Universal Credit

This scheme allows you to reclaim eligible childcare costs going back up to 3 months at any given point. So, you need to pay first and then claim eligible costs back within that time frame – otherwise you could miss out.

More Information is available here [and see our post about improvements to this scheme, including increased funding, following the Spring Budget 2023].

Childcare Funding Options for Students

Students are quite well supported in terms of childcare, with 3 key funding schemes that may help them with childcare costs.

The Student Childcare Grant:

The Student Childcare Grant does not need to be repaid and is in addition to any undergraduate Student Finance.This is a grant that does not need to be repaid and is in addition to any undergraduate Student Finance.

How Much Funding Can You Get?

The Student Childcare Grant can cover up to 85% of childcare costs. The maximum covered is £183.75 per week for 1 child, or that’s £315.03 for more than one (academic year 22/23).

Eligibility Essentials

As well as having a dependent child under 15 (17 if they have special needs), students must live permanently in England and be studying full-time in higher education. They must be eligible for undergraduate student finance based upon their income, but not have a postgraduate loan. Other caveats also apply including that it’s not available if the student is already claiming other specific funding for their childcare.

How To Get a Student Childcare Grant

The Student Childcare Grant can be applied for in tandem with the Student Finance application and is accessed, if successful, through a Student Finance Account.

More Information is available here

The ‘Learner Support’ Scheme:

Learner Support, designed for students who are suffering financial hardship, can be used to fund childcare.Learner Support is a type of financial support designed for students who are suffering financial hardship. It can be used to fund childcare for eligible students who are also parents.

How Much Funding Can You Get?

How much financial assistance you receive for childcare under the Learner Support Scheme will depend very much upon your particular circumstances.

Eligibility Essentials

To be eligible for the childcare element of Learner Support, you must be a parent over 20 (otherwise it’s 19). You must be facing financial hardship while studying on a further education course (Level 3 or over).

How To Get ‘Learner Support’ for Childcare

Learner Support applications must be made through the education setting that’s running the course. The financial assistance you receive, if eligible, can take the form of a repayable loan, a free grant or, in the case of childcare, payment direct to an Ofsted-registered childcare provider.

More Information is available here

The ‘Care to Learn’ Scheme:

Care to Learn may suit if you are a parent who is not yet 20 and are studying on a publicly-funded course.Care to Learn may suit if you are a parent who is not yet 20 and are studying on a publicly-funded course, although see caveats below.

How Much Funding Can You Get?

If eligible, you could get £160 for childcare, per week, for each child. That figure increases to £175 if you’re living in London. It can cover registration and deposit fees for your child’s childcare and to retain your child’s place over summer holidays. The scheme can also be used to fund childcare taster days (up to 5) at the childcare provider setting, and cover associated travel to/from the setting.

Eligibility Essentials

You must live in England and be the main carer for the child you are claiming for. You should be under 20 when the course starts and it must be a publicly-funded one at certain types of education setting. A few examples include schools, some colleges and sixth form schools/colleges plus others. It must not be a higher education course at a university. Other caveats also apply.

How To Get ‘Care to Learn’ Childcare Funding

Apply for Care to Learn funding here.

More Information is available here

Outstanding Childcare in Clayton-le-Woods, Chorley

An outstanding childcare providerLittle Acorns Nursery, Clayton-le-Woods, ChorleyLittle Acorns Nursery supports all the Government childcare funding options for eligible families. Please do ask us if you need any help clarifying your childcare funding options or with your application — we’ll be happy to help. Little Acorns Nursery and pre-school provides an outstanding, award-winning childcare service in Clayton-le-Woods, Chorley, Central Lancashire (PR6). We’re also conveniently close for those in Clayton Brook, Clayton Green, Thorpe Green, Pippin Street, Buckshaw Village and Whittle-le-Woods. Farington, Bamber Bridge, Lostock Hall, Euxton, Leyland and Penwortham are also nearby.

To make an enquiry about a possible place for your child at Little Acorns Nursery, please get in touch:

Are You Due £2,000 in Help for Childcare? Rough Guide to Tax-Free Childcare

Each year, around 1 million families miss out on thousands of pounds in free childcare funding, despite being eligibleEach year, around 1 million families miss out on thousands of pounds in free childcare funding — despite being eligible through the Government’s Tax-Free Childcare scheme. Are you one of them?

In today’s guide, we take a look at Tax-Free Childcare, which could effectively contribute anywhere from £2,000 to £4,000 per child, per year, towards childcare costs for eligible families. Those are significant sums, which could really help families, especially with the rising cost of living. The funding is there for for the taking if you’re eligible So, don’t miss out!

Let’s take a look.

What is Tax-Free Childcare?

In effect, the Tax-Free Childcare scheme subsidises childcare costs by utilising the tax that eligible families would ordinarily have pre-paid on the taxed income they use to pay for childcare. Specifically, the Government will add an extra £2 for every £8 that eligible families pay into a special account used childcare costs — even more if the child has disabilities. We’ll explain more about the childcare account later, but the good news is that you can get as much as £2,000 per child per annum if you’re eligible, or up to twice that if your child has disabilities. That’s a lot of money!

Who is Eligible for Tax-Free Childcare?

We explain who is eligible for Tax-Free Childcare.Families, including single parent families, are usually eligible for tax-free childcare scheme if they meet the following criteria:

  • The claimants are working (employed or self-employed) in the UK;
  • They each earn under £100,000 per annum;
  • They each earn at least £152 per week, which is £1,976 over the next 3 months (the equivalent of 16 hours per week at the National Minimum Wage or National Living Wage at time of writing);
  • They are not in receipt of childcare vouchers (which are closed to new applicants anyway), Universal Credit, Tax Credits or a childcare bursary/grant;
  • Parents/carers/guardians are over 16;
  • Children for whom they are claiming tax-free childcare is/are no older than 11 years of age or, if they have disabilities, no older than 16;
  • They should usually be living with the parent/carer/guardian(s) making the claim.

The above list represents the key rules governing eligibility for most families. However, there are some additional rules around eligibility — and some welcome exceptions to the above. Immigration and citizenship status may affect eligibility, for example, and some who are not working may still be eligible for Tax-Free Childcare under certain circumstances. Learn about eligibility rules for Tax-Free Childcare in more detail here.

Many will also be pleased to learn that families can also claim for the 30 Hours of free childcare scheme for 3 and 4-year-olds if they’re also eligible for that.

Which Providers Can Provide Childcare Under the Scheme?

Childcare providers using the Tax-Free Childcare funding must be registered with the Early Years Register, the Childcare Register or Ofsted.The Tax-Free Childcare contribution from the Government can only be used to pay for childcare provided by approved childcare providers that have signed up to the scheme. Such providers must be registered with either the Early Years Register, the Childcare Register or Ofsted in order to be approved. However, they can be nurseries, childminders, nannies, play schemes or even after school clubs. Little Acorns Nursery is, of course, such an approved childcare provider and would be happy to assist families to make the most of this very useful, free childcare funding opportunity.

How to Apply for Tax-Free Childcare

If you think you are eligible, you can apply for Tax-Free Childcare here. Applications usually take only twenty minutes or so and you will need:

  • Your Government Gateway User ID (or set one up if you don’t yet have one);
  • An email address and mobile phone at the ready;
  • Your own National Insurance number and that of your partner if you have one;
  • Your Unique Taxpayer Reference number (UTR) if self-employed;
  • One or more of the following (for you and your partner, if you have one): UK passport, P60, recent pay slip if you are working, Tax Credits confirmation from HMRC.

The application for Tax-Free Childcare will usually confirm right away whether you are eligible for tax-free childcare. It will also confirm if you’re eligible for 30 hours of free childcare for 3 and 4-year-olds, which is an added bonus.

How is it Paid?

A successful application results in the generation of a Childcare Account, held jointly by you and your partner if you have one. You will then need to credit your account with your own payments for childcare provision and the Government will top this up with their contributions, equivalent to 20% of childcare costs worth up to £2,000 per annum (paid as £500 max. per quarter) or £4,000 (paid as £1,000 max. per quarter) if your child has disabilities. Paying your contributions specifically by Bank Transfer will apparently speed up payment of the Government contributions, by the way.

Once funds are showing as available, your childcare provider can be paid for childcare services direct from your childcare account, as either one-off, or regular payments. It cannot be used to pay for anything else and you’ll be required to confirm that your details are still up-to-date each quarter (a reminder will be sent when this is required).

Good luck and do let us know if you need any help or advice in regard to your application.

Little Acorns Nursery, Clayton-le-Woods, ChorleyLittle Acorns: the Best Nursery & Pre-School in Clayton, Chorley & Central Lancashire

An outstanding childcare providerOur amazing National nursery award and outstanding Ofsted rating prove that we are probably the best nursery and pre-school for babies and under-fives in Clayton-le-Woods, Clayton Green, Clayton Brook, Chorley, Central Lancashire and even beyond. Give your baby, toddler or under-five child the best start in life by choosing the exceptional childcare service from Little Acorns Nursery. For more information or to register for a nursery place, please get in touch. Choose a button below to get started …

Arrange a Nursery Visit Send Us a Message Call: 01772 696 288