Happy little girl with her smiling teacher and Mum at nursery school

What help can you get with childcare costs?

author: Helen Fox

By Helen Fox

Recent research by Mumsnet and campaign group Pregnant Then Screwed revealed that 99% of parents with young children are finding the cost of living crisis more challenging because of the high cost of childcare.

62% of parents surveyed said childcare now costs the same or more than their mortgage or rent, rising to 73% among parents who work full time. 43% of Mums said they’re considering leaving their job because childcare costs them so much.

With this in mind, we’re taking a look at the schemes available to help with the cost of childcare. Are you making use of everything you’re entitled to?

Please note: this blog is mostly about the help available in England. Different and often similar schemes are available in Wales, Scotland and Northern Ireland, so be sure to check what’s available to you on your local government website.

Child Benefit

Child Benefit is money you can claim if you're responsible for at least one child who is under 16. If your child stays in approved education or training, you may be able to receive Child Benefit until they turn 20 years old.

If you’re eligible to claim, you’ll get:

  • £21.80 per week for your eldest (or only) child
  • £14.45 per week for each other child you have

 Money will usually be paid to you every four weeks, however if you’re a single parent or receive certain other benefits, you can arrange for Child Benefit to be paid weekly.

You cannot claim Child Benefit more than once for the same child. This means that if you don’t live with your child(ren)’s other parent but you share custody of them, only one of you will get Child Benefit. However, if you have more than one child but they don’t all live with you, then each parent can claim for the children that live with them.

For example:

  • there are three children: two of them live with their mother and one lives with their father
  • the mother can claim £21.80 per week for the eldest of the children that lives with her, and £14.45 per week for the younger child
  • the father can also claim £21.80 per week for the child that lives with him, regardless of their age compared to their siblings.

If two families come together who each have children, then you should claim £21.80 per week for the eldest child in the new, merged family, and £14.45 per week for each other child.

If you receive other benefits like Universal Credit or Income Support, then the benefit cap may affect the total benefits you receive, including Child Benefit.

Child tax credits

Although the tax credits system has been more or less completely replaced by Universal Credit now, you may still be able to claim Child Tax Credit if you already receive Working Tax Credit. If you already claim Child Tax Credit for some of your children but not all of them, you may also be able to add to your claim to get more help.

If you don’t already receive these tax credits, then you may be eligible for Universal Credit instead.

How much you can get in Child Tax Credit depends on:

  • when your claim started
  • when your children were born
  • how many children you have

The amount you can claim is set each tax year. The amounts we’ve shown are for the 2022-23 tax year.

If your claim started before 6th April 2017

If you’re already claiming Child Tax Credit and started your claim before 6th April 2017, then you should be receiving the “family element” of Child Tax Credit, and the “child element” of Child Tax Credit for all children you’re already claiming for. The family element is currently worth up to £545 per year, and the child element is worth up to £2,935 per year, per child. It can be more if any of your children are disabled.

If your claim started after 6th April 2017 (or you’re starting a claim now)

If you’re claiming Child Tax Credit for the first time now, then what you can get depends on when your children were born. If any or all of your children were born before 6th April 2017, then you’ll receive the family element of Child Tax Credit as mentioned above. If all of your children were born before 6th April 2017, you’ll also be able to claim the child element of Child Tax Credit for each of them.

No matter when your claim started, if any of your children were born after 6th April 2017, then you’ll usually only be able to claim the child element of Child Tax Credit for them if they’re the first or second child you’re claiming for. This means if you have two children born before 6th April 2017 and one born after, you will not be able to claim Child Tax credit for the youngest child. However, some exceptions apply, so it’s worth checking these before assuming you can or cannot claim.

Tax-Free Childcare

Tax-Free Childcare can give you up to £2,000 per year for each of your children to help with their childcare costs. If you have a disabled child, then you can get up to £4,000 per year under this scheme.

You can use Tax-Free Childcare to help towards the cost of approved childminders, nurseries, nannies, “wraparound” school clubs and play schemes from your child’s birth until they are 11 years old. So, it’s a useful thing to have in the early years, before your child is eligible for free childcare hours, and once they start school, too.

To use Tax-Free Childcare, you’ll set up an online childcare account for each of your children. For each £8 you pay into each account, the government will add £2 to use to pay your childcare provider, up to a limit of £500 every three months. This effectively makes your childcare tax-free.

Like Child Benefit, you cannot claim Tax-Free Childcare more than once for the same child. So, if you and your child(ren)’s other parent are not together, you will need to decide who should apply if you are jointly responsible for your child(ren). If you can’t agree, then you should both apply for a childcare account separately and HMRC will make the decision.

Free childcare hours

All children in England aged three to four are entitled to up to 30 hours of free childcare each week. This is split into two schemes, and which one is best for you will depend on your circumstances.

Whichever scheme you use, you will need to use an approved childcare provider. This usually means they’ll be on the Early Years Register with Ofsted. You may also need to pay for extra costs like meals, nappies and trips, even if you’re using your free hours at the time.

15 hours of free early education and childcare

All three- and four-year-olds in England can receive 570 hours of free early education and/or childcare per year. This is usually taken as 15 hours per week during term-time, which spans 38 weeks of the year. You may be able to spread the hours out differently to suit you, but will need to speak to your childcare provider about this.

To claim your child’s free hours, speak to their nursery, childminder or other provider. Once you’ve shown them proof of your child’s age (usually their birth certificate), then they will apply on your behalf.

Using this scheme doesn’t affect your entitlement to claim tax-free childcare or to use Universal Credit or tax credits (if you still get them) to pay for additional hours of care you may need. However, if you’re working, you may be entitled to more hours of free childcare that save you money.

30 hours of free childcare

If you’re working and meet certain criteria, then you may be able to receive 1,140 hours of free childcare for your three- or four-year-old per year instead of (not as well as) the 570 hours above. These hours are also usually taken over the 38 weeks of term-time, so equate to 30 hours per week. Again, you may be able to spread your hours out differently to include school holidays or longer days. But, you’ll need to speak to your childcare provider about whether they offer this.

If your application to receive these free childcare hours is approved, then you’ll pay using a code that you give to your childcare provider. You can use this scheme alongside Tax-Free Childcare if you need more childcare hours for your child, as long as you’re eligible for both.

Free childcare for younger children

If you receive certain benefits, you may qualify for some hours of free childcare for your child from the time they are two years old. You may be eligible for this if you receive:

  • Income Support
  • income-based JSA or ESA
  • Universal Credit, where your household income is £15,400 or less per year after tax (excluding benefit payments)
  • child tax credits, and your household income is £16,190 per year or less before tax
  • the guaranteed element of Pension Credit
  • the Working Tax Credit 4-week run on

You may also be able to receive free childcare for a two-year-old if they:

  • are looked after by a local authority
  • have a statement of special education needs or an education, health and care plan
  • receive Disability Living Allowance
  • have left local authority care under an adoption order, special guardianship or a child arrangements order

If you think you or your child falls into one of these categories, then speak to your local council to double-check your eligibility and find out how many hours of care you can get for free

Free school meals

Once your child reaches school age, they may be eligible for free school meals. If you qualify for free school meals, you’ll also be eligible for the Holiday Activity and Food Programme, which provides free, fun activities and nutritious meals to children during school holidays. If you’re interested in this, contact your local council for more information.

Free school meals if you receive benefits

Your child may be able to get free school meals if you receive any of the following benefits:

  • income support
  • income-based JSA or ESA
  • support under Part VI of the Immigration and Asylum Act 1999
  • the guaranteed element of Pension Credit
  • Child Tax Credit (as long as you are not also entitled to Working Tax Credit and your annual income is £16,190 or less before tax)
  • working tax credit run-on
  • Universal Credit, where you applied on or after 1st April 2018 and your household income is less than £7,400 after tax (excluding benefit payments)

If your child is eligible for free school meals, then they’ll continue to be eligible until they finish the phase of schooling they’re in, whether that’s primary or secondary, on 31st March 2023. This means you may have to re-apply for free school meals when your child moves from primary to secondary school.

Infant school meals

If your child attends a state school and is in reception class, year one or year two, they will be able to get free school meals. This is offered to all children in these year groups, and is not limited to children whose parents receive benefits. However, if you do also receive benefits, then let the school know as they may be able to claim extra funding!

Can you get help with childcare costs?

Some of the options to get help with childcare costs are means-tested. This means that the amount of help you’re eligible for is determined by your personal or household income.

The majority of people will be able to use at least one of the schemes we’ve mentioned above. However, if you claim benefits, then using these childcare schemes may affect your entitlement and could leave you worse off. On the flip side, if you have a relatively high income and you claim help with childcare costs, then you may be asked to pay some or all of the cost back. So, whatever your circumstances, it’s best to check your eligibility before you claim to avoid inadvertently leaving yourself worse off!

You can check your eligibility for the different schemes to help with childcare costs on the government website here.  

Disclaimer: All information and links are correct at the time of publishing.

author: Helen Fox

By Helen Fox

Happy little girl with her smiling teacher and Mum at nursery school Happy little girl with her smiling teacher and Mum at nursery school