Friday 24 March 2017

Parents Now Can Register For Government's New £2,000 Tax-Free Childcare Scheme

Childcare Scheme

Millions of parents can now pre-register their interest for the government’s new 'childcare offers' scheme, as announced in chancellor Philip Hammond's Budget speech earlier this month.

This includes families looking to take advantage of the new Tax-Free Childcare scheme, as well as those that want to sign up to the new 30 hours' free childcare service, which launches later this year.

To register, parents are advised to complete the form on the government's new Childcare Choices website.

Chief secretary to the Treasury, David Gauke, said: "This government is on the side of working families and our childcare support will cut thousands of pounds off bills for millions of households, as well as supporting parents to return to or remain in work."

Education secretary Justine Greening said: "Affordable childcare and early years education are a vital part of how we can get our children on the right path, whilst also helping parents to be back at work, if that is what they want.

"Many parents are struggling to balance the cost of childcare against the benefits of being in work and this government wants to help.

"From today, parents can use the Childcare Choices website to find out what support is available for their family. Whether that’s our 30 hour free childcare offer, Tax-Free Childcare or Universal Credit."

What is the new '£2,000 Tax-Free Childcare scheme'?

The 'Tax-Free Childcare scheme' - which is set to launch on 28 April - will see the government contribute 20p for every 80p that working parents spend on care costs each year.

This is the equivalent of the 20% tax many people pay on their earnings - hence the name 'tax free'.

It will offer as many as two million working families in the UK up to £2,000 a year for each child under 12, or £4,000 for disabled children (to the age of 17).

To begin with, the scheme will initially focus on parents with the youngest children (aged 2 or under) - before being rolled out nationally by the end of the year.

Am I eligible?

The scheme is good news for those who work for companies that don’t offer childcare vouchers, and for the self-employed.

To qualify, parents will have to:

  • Be employed
  • Both adults must be earning at least £115 a week and not more than £100,000 each year.
  • Live in England

While both parents must be working to qualify, those temporarily absent from the workplace such as those on paid or unpaid maternity, paternity or adoption leave will still be eligible.

I get Employer-Supported Childcare - can I claim both?
Childcare Scheme

No. Tax-Free Childcare is replacing Employer-Supported Childcare, including ‘childcare vouchers’, which is only available to parents if their employer offers it.

Employer-Supported Childcare will be closing to new entrants from April 2018, but parents who are already a member of the scheme will be able to remain in it as long as their employer continues to offer it.

How can I get involved?

Parents must express their interest online by pre-registering on the Childcare Costs website.

Your application will then be reviewed, and if successful, you'll be able to open an online account - provided by NS&I.

You then pay into this account, which is then topped up by the government to cover the cost of childcare.

For every £8 that families or friends pay in, the government will make a top-up payment of an additional £2, up to a maximum of £2,000 per child per year (or £4,000 for disabled children).

This top up is added instantly and parents can then send electronic payments directly to their childcare providers.

You can save more than £8,000 in each account but any extra will not earn a top-up.

30 hours' free childcare - what you need to know

On top of this, from September this year, parents of three-and-four-year-old children living in England will also be able to apply for a new 30 hours free childcare offer, which the government says is worth around £5,000 per child.

Eligible parents can benefit from both Tax-free Childcare and free childcare at the same time.

Parents will be able to apply online through the childcare service.

They will receive a code – this will allow parents to arrange their childcare place ahead of September 2017.

Childcare Scheme

Parents can take their code to their provider or council, along with their National Insurance Number and child’s date of birth. Their provider or council will check the code is authentic and allocate them a free childcare place.

For more information, the Childcare Choices website includes a Childcare Calculator for parents to compare all the support options available, and narrow down what works best for their families.



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