Childcare benefits explained for parents of preschool and primary school children

Childcare benefits explained for parents of preschool and primary school children
The government provides benefits that can help with the cost of childcare, including breakfast and after-school clubs. We explain what you might be able to claim.
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Whether your child is starting preschool or nursery, or is already at school full-time and you need wraparound childcare, you may be able to claim benefits to ease the financial burden of childcare.

Free childcare for three- and four-year-olds

All three- and four-year-olds are entitled to a total of 570 hours’ free childcare per year. This is usually taken as 15 hours a week for 38 weeks a year (in other words, in school term-time) but you could, for example, choose to use fewer hours a week for more weeks of the year depending on whether your childcare provider is open and has availability.
 
Some children qualify for an additional 570 hours’ free childcare per year. This is usually taken as 30 hours per week for 38 weeks, but if you use fewer than 30 hours per week, you may be able to use it for up to 52 weeks a year.
You can split your funding between up to three different settings.

Are you eligible for free childcare?

All families, regardless of income, are entitled to 15 hours’ free childcare from the term after the child turns three.
 
You can usually claim 30 hours’ free childcare if:
  • You (and your partner, if you have one) are in work, including on maternity/paternity/adoption/sick leave.
  • You (and your partner) earn at least the National Minimum Wage or Living Wage for at least 16 hours a week.
  • You (and your partner) expect to earn no more than £100,000 in the current tax year, after tax and before any personal allowances. 
You may also be eligible if your partner is working and you are currently not working (or vice versa), but receive Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or ESA.
 
Free childcare stops when your child starts Reception or reaches compulsory school age.
 
You can only claim your free hours if your child is in an approved childcare setting:
 
  • A registered childminder, nanny, playscheme, nursery or club.
  • A childminder or nanny working for a registered childminder agency or childcare agency.
  • A registered school.
  • A home care worker registered with a home care agency.

How much is free childcare worth?

Free childcare hours are paid directly to your childcare setting at a rate of £6.85 per hour. The setting is not allowed to charge you more than £6.85 per hour, even if its private rate per hour is more than this. They can, however, charge you for extras like meals, and for additional hours beyond your 15 or 30 hours’ entitlement.

How to apply for free childcare

If your child is the right age to qualify for 15 hours’ free childcare, you can search for free early education in your area. The setting will be able to tell you how to arrange childcare; in the case of places like school nurseries, they are usually paid directly.
 
If you qualify for 30 hours’ free childcare, you’ll need to apply online.
 
You’ll then be sent a code to give to your childcare setting to claim the additional hours.

How to use free childcare

Free childcare can only be used to pay for childcare from approved settings, as explained above.

Tax-Free Childcare

This is a benefit that allows you to pay for approved childcare without tax. For every £8 you pay into your online childcare account, the government will add another £2 to help pay for childcare, including approved wraparound care such as breakfast clubs and after-school clubs.

Are you eligible for Tax-Free Childcare?

You may qualify for Tax-Free Childcare if you (and your partner, if you have one) are in work, including on maternity, paternity, shared parental or sick leave.
 
You (and your partner) need to earn, or expect to earn, at least the National Minimum Wage or Living Wage for an average 16 hours per week for the next three months.
 
If you or your partner have an ‘adjusted net income’ of over £100,000 per year, you will not be eligible.
 
You can claim Tax-Free Childcare if you also qualify for 30 hours’ free childcare.
 
You can’t claim Tax-Free Childcare if you already claim Child Tax Credit or Universal Credit.

You can use the government’s Childcare Calculator to see if you’d be better off claiming Tax-Free Childcare.

How much Tax-Free Childcare could you get?

Depending on how much you pay into your childcare account, you could claim up to £500 every three months (£2,000 per year). This doubles if your child is disabled.

How to apply for Tax-Free Childcare

You’ll need to set up an online childcare account, and then apply for Tax-Free Childcare through your account. It takes about 20 minutes to apply.
 
You need to reconfirm your details every three months.

How to use Tax-Free Childcare

Tax-Free Childcare can only be used to pay for approved childcare. For every £8 you pay into your childcare account, the government will automatically add £2. You then pay your childcare provider from this account.