MORE than 1million families are missing out on up to £2,000 cash for help with childcare costs.
Of the 1.5million households estimated to be eligible for the support, just 316,000 claimed it in September.
Tax-free childcare allows parents to claim up to £500 every three months up to a total of £2,000 a year.
Parents of children with a disability can get £1,000 every three months up to £4,000.
If you get tax-free childcare, you’ll set up an online childcare account for your child.
For every £8 you pay into this account, the government will pay in £2 to use to pay your provider.
Since the scheme was launched in 2017, the government has spent less than it forecast every year.
in the last financial year it had budgeted £710million for the scheme but spent just £240million.
In the previous year it forecast spending £570million, compared to actual expenditure of £240million.
The figures, revealed in a response to a parliamentary question by Labour MP Tulip Siddiq, also show the original forecasts for the scheme were reduced.
Originally, the Office for Budget Responsibility had predicted a £3billion spend for the 2017-2021 period.
The forecast shrank to £1.62billion but the actual amount spent was £630million.
Who is eligible for tax-free childcare?
Your eligibility for tax-free childcare depends on if you’re working, your income, your child’s age and your immigration status.
You can usually claim the benefit if you – and your partner, if you have one – are:
- in work
- on sick leave or annual leave
- on shared parental, maternity, paternity or adoption leave
If you don’t work, you might still be able to claim if your partner is working and you get Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or contribution-based Employment and Support Allowance.
Your child must be 11 or under and usually live with you, but you can no longer claim from September 1 after their 11th birthday.
Adopted children are eligible, but foster children are not.
To be eligible for Tax-Free Childcare, you – or your partner if you have one – must have a National Insurance number and at least one of the following:
- British or Irish citizenship
- settled or pre-settled status, or you have applied and you’re waiting for a decision
- permission to access public funds – your UK residence card will tell you if you cannot do this
There are other eligibility criteria which you can find on the government’s website.
How can I claim tax-free childcare?
There’s one application for Tax-Free Childcare and another benefit giving you 30 hours free childcare.
As part of your application, you will find out if you can get both.
To apply, head to the government website to fill out a form.
You’ll need to set up the account, and use it to pay for your registered childcare.
You’ll need details to hand for both you and your partner including:
- National Insurance numbers
- Unique Taxpayer Reference (UTR), if either of you are self-employed
It takes 20 minutes to apply, and it can take up to seven days to find out if you are eligible.
You need to reconfirm your details every three months to keep getting the help.
What other help is available?
There are a range of other schemes available for help with childcare casts.
If you’re on Universal Credit you can claim back 85% of childcare costs up to £646.35 for one child or £1108.04 for two or more up to August 31 following the child’s 16th birthday.
All three to four year old children in England are entitled to 15 hours of free childcare – amounting to 570 hours per year – from the term after their 3rd birthday.
The free allowance is usually taken as 15 hours per week for 38 weeks of the year, but it is possible to take it at a time that suits you.
Working parents may be eligible to get more hours of free childcare for their three to four year olds.
In order to access the extra 15 hours per week, you must be working at least 16 hours a week on average and earning the National Minimum Wage or more.
Parents living in England and claiming certain benefits can also access free childcare for their two-year-olds if they receive certain benefits.
Some families can claim a basic rate of £545 per year in child tax credit, with an additional £2,845 per child.
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