I work part time and am struggling to pay my childcare costs. Is there any help available?
You may be able to get help with childcare costs as part of Working Tax Credit if you work at least 16 hours a week.
You can get help with childcare costs up to the September following a child’s 15th birthday, or 16th birthday if your child receives Disability Living Allowance or is registered blind.
What type of childcare can I claim costs for?
The childcare must be provided by:
- a registered childminder, nursery or play scheme;
- an out-of-hours club (and some holiday clubs) on school premises run by a school or local authority;
- a childcare scheme run by school governing bodies in Extended Schools;
- a childcare scheme run by approved providers, for example, an out-of-school-hours scheme (they will tell you if they are ‘approved’);
- an approved foster carer (the care must be for a child who is not the foster carer’s foster child);
- in England only, a person approved to care for your children or a domiciliary worker or nurse from a registered agency in your home; or
- in England only, childcare in the child's home, or for over 7-year-olds on other domestic premises, if the childcarer is approved under the Childcare Approval Scheme.
The childcarer must not be related to the child even if they are registered or approved.
How is the amount of the childcare element of Working Tax Credit worked out?
The childcare element of Working Tax Credit helps with up to 80 per cent of your eligible childcare costs, up to costs of £175 a week for one child and £300 for two or more children. This means that you could get a maximum amount of £140 per week for one child and £240 per week for two or more children.
When you tell the Tax Credit Office the amount of your childcare costs you can either:
- work out the average costs for the last four weeks in which you made payments - a week in which you did not pay (for example, because you were on holiday) is ignored; or
- if the amount you pay varies (for example, because you pay more or only use childcare during school holidays), you can work out your costs by working out the average you paid over the last 52 weeks.
If you have just made an arrangement with a childcare provider, you should estimate your weekly costs. If your childcare costs change or you start to pay for childcare for the first time, see below.
Changes in childcare costs
If you stop paying childcare costs, or your costs reduce by £10 or more a week, your tax credits will be reduced at the end of four weeks after the date of change. You may be overpaid if you did not report the change and may be liable for a penalty of up to £300 if you do not report the change within three months. If you start to pay for childcare costs, or your costs increase by £10 or more a week, your tax credits will increase from the date of change, provided you report this within three months.
You should also tell the Tax Credit Office if you change childcare provider, as they may check with the provider named on the form to see if the details are correct.
When working out whether your childcare costs have changed, you should follow the same steps you used to work out your childcare costs originally.
What if I want to work less than 16 hours a week?
If you are considering starting work of less than 16 hours per week, see the New Deal for Lone Parents adviser at your local Jobcentre Plus office. If the paid employment you take up is agreed with the adviser and expected to last more than five weeks, you may be entitled to a Childcare Subsidy of up to a maximum of £67.50 per week for one child, and £100 per week for two or more children.
Further information
Further information on childcare is available from Childcare Link at www.childcarelink.gov.uk