The childcare element of Working Tax Credit
Working Tax Credit provides a top up to wages for those on low incomes. Extra help is available for working parents through a childcare element, which can help with the cost of registered or approved childcare. It can offer up to 80 per cent towards the costs of eligible childcare up to a maximum level of £175 per week for 1 child and £300 per week for 2 or more children.
So if you have 1 child in childcare and you pay £175 per week or more, you could receive up to a maximum of £140 per week and with 2 or more children in care that costs £300 or more, you could receive up to £240 per week. The actual amount you receive will depend on your income and your childcare costs.
To be eligible for the childcare element of Working Tax Credit:
- If you are lone parent you must work 16 hours or more per week.
- If you are part of a couple, both you and your partner need to be in paid employment of 16 or more hours per week. However, you will also be eligible if 1 of you works 16 or more hours per week and the other does not work, but is an in-patient in hospital, in prison or incapacitated for childcare purposes.
- The childcare you use must be registered with Ofsted or approved through the Childcare Approval Scheme in England or through the Care Standards Inspectorate for Wales
The main elements of Working Tax Credit are paid directly to whoever works in the family. However, the childcare element is paid directly to the main carer alongside Child Tax Credit payments (in some cases, such as lone parents, this will be the same person).
For more information about the childcare element of Working Tax Credit contact the Tax Credits Helpline on 0845 300 3900 or visit the website at: www.hmrc.gov.uk.
Find out if you are eligible for the childcare element of Working Tax Credit online now.