Are you eligible for free childcare following the spring budget?
In his Spring Budget, Chancellor of the Exchequer Jeremy Hunt unveiled plans to help eligible working parents with childcare costs by offering 30 hours of free childcare for all under-5’s from the moment maternity/paternity leave ends.
Under the current system in England, parents who work the equivalent of 16 hours per week on National Minimum Wage receive 30 hours of funded childcare for any three and four year olds they have.
The new reforms will see the provision extended to cover all children from the age of nine months, to encourage parents and carers back into work sooner, and to help with the cost-of-living crisis the country is currently facing.
It comes at a time when childcare costs have risen by nearly six per cent in the past twelve months, with the average cost of a full-time nursery place for a toddler costing £14,836 a year, and with one in four parents saying the cost of their childcare is more than 75 per cent of their take-home pay.
Who qualifies for 30 hours’ free childcare?
Currently, you are entitled to 30 free hours if you live in England and your child is three or four years old. Under the new government rules, you will be able to claim for children aged from nine months old.
You can claim 30 hours free if:
- You and your partner (if you have one) both work
- You’re on sick or annual leave
- You’re on parental, paternity or adoption leave
You may still be entitled to the funding if your partner works and you claim benefits like Incapacity Benefit or Carer’s Allowance. You can check the government website for a full list.
There are also income brackets to qualify based on age. You can claim if, over the next three months, you and your partner (if you have one) earn at least:
- £1,976 if you’re aged 23 or over
- £1,909 if you’re aged 21 or 22
- £1,420 if you’re aged 18-20
- £1,000 if you’re under 18 or an apprentice
Certain types of income, including interest and dividends are not counted towards your income and there are different wage brackets if you are self-employed.
If you or your partner (if you have one) are expected to earn over £100,000 in the current tax year, you will not be eligible.
How do you apply?
The application process is carried out online at gov.uk/apply-30-hours-free-childcare.
You will be asked for both you and your partner’s details (if you have one) to check your eligibility. If successful, you will be sent a code to send to your childcare provider to claim your free hours.
When does the new scheme start?
The changes are expected to be fully in place by September 2025, as the government will introduce the scheme in stages to ensure there are enough childcare places.
Children up to two years old will be entitled to 15 hours free childcare a week from April 2024.
Children from nine months up will benefit from September 2024 and by September 2025 all working parents of a child under five will have access to 30 hours free.
While this is a real help for working parents, it could come too late for some. If you’re already in debt and worrying about how you’re going to make ends meet, we can help. And while we’re finding you the best solution to your problem debt, we will also carry out a benefits entitlement check to make sure you’re receiving all the help you’re entitled to.
Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.
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