The government has introduced new ways to help parents with childcare costs, but it has left many confused and bewildered on how it will affect them and their monthly outgoings. Here we explain what changes have come into play, and also how First Steps has implemented them.
What’s new?
You may already know that the government is rolling out a scheme offering 30 hours free childcare to some families with children aged 3 to 4-years-old. The 30 hours free childcare scheme is great news for eligible families, who could claim up to double the amount of free childcare they are currently entitled to.
There is also another way to get Government support with your childcare, which is tax-free childcare.
What is the 30 Hours Free Childcare scheme?
All 3 and 4-year-olds in England are currently entitled to up to 15 hours a week free childcare for 38 weeks of the year (during school term-times). From September 2017, this entitlement could go up to 30 hours a week for 38 weeks of the year for some working families.
This could take your free childcare entitlement from 570 hours a year up to 1,140 hours a year.
What is Tax-Free Childcare?
If you’re a working parent with children under 12 (or under 17 for disabled children), you can open an online account to pay for registered childcare.
The government will top-up the money you pay into the account. For every £8 you pay in, the government will add an extra £2.
You can receive up to £2,000 per child – that’s up to £500 every three months. If you have a disabled child, you can receive up to £4,000 per child – that’s up to £1,000 every three months.
Parents of children born on or after 1st April 2013, and parents of disabled children, can apply now.
How do I know if I am entitled to 30 hours free childcare?
In order to receive 30 hours free childcare, you’ll need to be able to answer ‘Yes’ to the following questions:
- Will my child be aged 3 or 4 when the scheme starts?
- Are both parent/carers working (or am I as a sole parent/carer, working)?
- Does each parent/carer earn (on average) the equivalent of 16 hours a week at National Minimum Wage or National Living Wage?
- Does each parent/carer have an annual income of less than £100,000?
The easiest way to find out whether you’re eligible is to use this free online calculator.
How do I know if I am entitled to Tax-Free Childcare?
You, and any partner must each expect to earn (on average) at least £120 per week (equal to 16 hours at the National Minimum or Living Wage). If you, or your partner, are on maternity, paternity or adoption leave, or you’re unable to work because you are disabled or have caring responsibilities, you could still be eligible.
If either you or your partner, expect to earn £100,000 or more, you can’t get Tax-Free Childcare. You can’t use Tax-Free Childcare at the same time as childcare vouchers, Universal Credit or tax credits. You can use it with the 15 hours and 30 hours schemes.
How do I get the ‘30 hours free’ childcare at First Steps?
To apply for 30 hours free childcare you’ll need to make an online application to HMRC.
- Once you’ve completed your application, you’ll be told whether or not you’re eligible for 30 hours free childcare.
- If you are eligible you will then receive a code.
- You will need to bring your code into the nursery and give it to the First Steps management team, along with your National Insurance number.
- Then all you must do is wait for the First Steps’ team to check the code is correct and set up your free childcare hours for you. It’s as simple as that!
How is First Steps billing the hours?
First Steps runs a 10.5 hour day, it will be charging parents for the cost of food and consumables separately to the free hours.
- Food and consumables will be charged at £7 per day.
- There is 13 weeks’ holiday a year where normal fees apply, so the 30 free hours will be taken over 38 weeks of the year. But to make it simpler, fees are averaged over the year, so you will pay the same amount each month.
As this is a brand-new scheme, the information that is currently available can be a little confusing. Ian is always available to answer any questions you might have. Pop into the nursery for a chat about how you can get help with your childcare costs any time.