Childcare can be a major problem for many working parents of young children. Before your child reaches school age, for example, you will need someone to take care of him or her if you are working. So, how can you get help with childcare? What if you do not have family or friends to rely on for help?
What are Your Childcare Options?
There are several options available when it comes to childcare. You can choose from the following:
- Registered Childminder
- Day Nursery
- Au Pair.
Who you choose to look after your child will depend on your requirements and preferences. A registered childminder is a self-employed individual who takes care of children in his or her own home. You will not be this person’s employer, so will not have to pay tax or NI contributions, but you will have to make alternative childcare arrangements if your childminder becomes ill or goes on holiday.
A nanny will work in your home and similarly to a childminder, you will need to get other help with childcare if he or she is on holiday or goes sick. In addition, you will be an employer and will have to pay tax, NI contributions, and make pension contributions for your nanny.
You may choose to use a day nursery for your child, which can be a great option as these tend to be open from 8am to 6pm. This means that most people’s working hours are covered. However, day nurseries tend to be more expensive than other childcare options. Furthermore, if your child is ill, he or she will be unable to attend, meaning you will have to look elsewhere for help with childcare.
An au pair is another option when it comes to help with childcare. Au pairs tend to be foreign students who come over to our country and live in your home. They will look after your children while they learn the language. Although you will have to factor in their accommodation and board, the cost of paying them to care for your kids can be much lower than other childcare options.
Can You Get Help with Childcare Costs?
The cost of childcare can be quite high and does tend to eat up a huge chunk of take-home pay every month. So it is not surprising that many working parents are looking for help with childcare costs. Fortunately, the UK has plenty of schemes that can help reduce the amount you have to pay.
The help with childcare costs that you may be eligible for will depend on the age of your child, your personal circumstances, and where you live in the country. But all three- and four-year olds in the UK are entitled to some free childcare or early education.
In England, 570 hours of free childcare is available for every three- and four-year-old. This is most commonly taken over term-time, and it equates to fifteen hours over thirty-eight weeks. There are some free childcare hours available for two-year-olds too, depending on whether you are in receipt of certain benefits. To claim free childcare hours, your childcare provider must be registered with the relevant body – Ofsted in England.
You might also be entitled to claim thirty hours of free childcare, provided you and your partner meet eligibility criteria. You must both be in work and earning at least the National Living or Minimum Wage for sixteen hours each week. If either of you earn more than £100,000 per year, you will not be eligible.
In Wales, three- and four-year-olds are entitled to ten hours of free childcare per week, over the course of thirty-eight weeks. A pilot scheme began in September 2017 across seven local authorities that saw free childcare hours increased to thirty hours per week over the course of forty-eight weeks. It is expected that the scheme will be rolled out across the rest of Wales once the pilot scheme has been completed.
In Scotland, all three- and four-year olds are eligible for around sixteen hours of childcare per week over thirty-eight weeks, or six hundred hours per year. Two-year old children can also access free childcare if you are in receipt of specific benefits.
Other Financial Help with Childcare
You may be wondering what help is available for your child if this child is a baby or an older school-aged child. The good news is that there are other schemes in operation that might help to reduce your costs.
Working Tax Credit is being replaced by Universal Credit, which is a new benefit designed to help both those in work and those who are unemployed. Families with working parents who are eligible for Universal credit can claim up to eighty-five per cent of the amount they pay in childcare costs per month. To qualify, you and your partner must be in work or have a job offer. The maximum amount of childcare costs that can be claimed per month is £646 for one child and £1108 if you have more than one child.
Until Universal Credit is fully rolled out, you can continue claiming Working Tax Credit, but you cannot claim both. This benefit could mean you can claim back up to seventy per cent of the amount you pay in childcare costs each month. To qualify, you and your partner need to be working at least sixteen hours every week and be paying a registered childcare provider. The maximum amount that can be claimed is £122.50 per week for one child and £210 per week for more than one child.
What is Tax-Free Childcare?
Another new scheme being implemented to help with childcare costs is Tax-Free Childcare. This scheme allows you to claim help with paying for your childcare for children under the age of twelve, or under the age of seventeen for disabled children.
It can be used in conjunction with the free childcare hours for two- to four-year olds but cannot be used with childcare vouchers, tax credits or Universal Credit. It is available for working parents who are either employed or self-employed, but you must both be working and earning at least the National Living or Minimum Wage for sixteen hours per week.
With Tax-Free Childcare, the Government will pay twenty pence for every eighty pence you pay towards your childcare costs. You can claim up to £2,000 per year for each child, or £4,000 per year for a disabled child.