Childcare Element of Working Tax Credit (WTC)
WTC supports working people (employed or self-employed) on low incomes by topping up earnings. Eligibility and the amount of WTC you receive will be based on your circumstances, for example how many hours you normally work and your income (or joint income, if you are part of a couple). You must be working at least 16 hours a week if you are a lone parent. If you have a partner, you must work at least 24 hours per week between you, with one of you working at least 16 hours per week. If only one of you is working, it must be for at least 24 hours per week. Extra payments are available to disabled workers.
WTC is paid in addition to any Child Tax Credit you may be entitled to.
As part of WTC you may qualify for extra help towards the costs of registered or approved childcare. This is known as the Childcare Element of WTC and can pay up to 70% of your childcare costs. You must be working at least 16 hours per week if you are alone parent, and if you have a partner, you must both work for a minimum of 16 hours per week. The maximum help you can get for your childcare through tax credits is £122.50 a week for one child or £210 a week for two or more children. The actual amount you get will depend on your income - the lower your income, the more tax credits you can get. For more information visit https://www.gov.uk/working-tax-credit/overview or call the Tax Credits helpline on 0345 300 3900 to order a claim pack.
Employer Supported Childcare / Salary Sacrifice Scheme
Some employers support their employees with childcare costs by offering childcare voucher schemes. This works by replacing part of your salary with vouchers that you then use to pay for childcare. The benefit of this is that the amount taken as a voucher is exempt from tax and National Insurance Contributions (NIC). Your partner can also take advantage of childcare vouchers if their employer runs a scheme. For more information visit: https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye.
Joining a salary sacrifice scheme and taking childcare vouchers may affect the amount of tax credits you can get. There is an online calculator which can be used to help you decide whether - overall - you would be better off taking the childcare vouchers or not. Visit http://www.hmrc.gov.uk/calcs/ccin.htm
Speak directly to your employer / HR department to find out if they offer a salary sacrifice scheme and for more information.
Care to Learn
If you’re under 20 and have one or more children, Care to Learn can help with the cost of childcare while you learn, paying up to £160 per child, per week to cover:
- childcare while you're learning, on work placements or doing private study
- registration fees or deposit charged
- a childcare taster (up to 5 days) to help your child settle in before the learning starts
- childcare fees you may need to pay in holidays to keep the childcare place open
- additional travel you may have to pay for to take your child to the childcare provider
The childcare provider receives payment direct from Care to Learn. Any funding to help with travel will be paid directly to the learning or training provider who will reimburse you. For further information visit https://www.gov.uk/care-to-learn/overview or contact the Learner Support Helpline on 0800 121 8989.
The Childcare Grant
The Childcare Grant is there to help full-time Higher Education students with the cost of registered childcare during term time and holidays.
You can apply if you:
- are a full-time undergraduate student
- have dependent children under 15, or under 17 with special educational needs
- have a student finance package or are eligible for one
- are permanent resident in England
- the children in your grant application are financially dependent on you
- your childcare provider is on the Ofsted Early Years Register or General Childcare Register (check with your provider)
- if your child is cared for at home, the carer can’t be a relative and must be registered with an appropriate body - check with Student Finance England
If you, or your spouse or partner, get the childcare element of the Working Tax Credit or the childcare element of Universal Credit, you won’t be able to get the Childcare Grant as well.
The Childcare Grant could cover up to 85% of your childcare costs up to a maximum of £155.24 per week if you have one child or £266.15 per week if you have two or more children. The amount you get depends on your household income and the actual costs of your childcare. For more information visit https://www.gov.uk/childcare-grant/overview or call Student Finance England on 0300 100 0607.