Financing Childcare Services
if you have one or more children and want to go back to work, then there are a number of schemes, grants and loans available to help out with the financial cost of childcare.
1. Free Early Education
All 3 and 4 year olds are entitled to 12.5 hours of free early education for 38 weeks of the year, which will rise to 15 hours a week by September 2010. This entitlement applies from the term following their 3rd birthday (1 September, 1 January or 1 April) until the child reaches reach statutory school age (the term following their 5th birthday).
The early education can take place in:
- accredited childminders
- maintained nursery schools
- private nursery schools
- nursery classes attached to primary schools
- day nurseries
- playgroups
- preschools
- primary school reception classes
- Sure Start Children's Centres
To be eligible, the establishment must be inspected regularly by Ofsted, be included in the local authority's Directory of Providers, and must also help children progress towards the 'early learning goals' set out in the Early Years Foundation Stage.
The free sessions must be taken over a minimum of 3 days, typically in 5 or 6 morning or afternoon sessions for around two and a half hours each. These sessions can be arranged to suit you and your child; for example, you may want 2 sessions a day for 3 days, or a morning session from Monday to Thursday, and a morning and afternoon session on Friday.
There's no grant or voucher involved with these free sessions, you simply need to check with your local Family Information Service (FIS) that the provider is registered to offer the entitlement.
2. Help for Single Parents
If you are an unemployed single parent on Income Support, then the government's New Deal for Lone Parents could help you get back into work. This programme offers parents advice on training and jobs, as well as help with childcare costs while you attend interviews or work trials, and advice on benefits you may be entitled to receive.
If you need to undergo work-related training, you can also receive help with childcare costs, as long as the course is less than a year long, and is up to NVQ/SVQ level 2 or equivalent (in some cases, up to NVQ/SVQ level 3). Whilst training, you could receive a maximum of £94.50 per week for one child, or £140 per week for two or more children to help you pay for childcare. This money is paid directly to the eligible childcare provider (registered childminder, playscheme, playgroup, pre-school, nursery or out of school scheme). If your childcare costs more than this you will have to pay the difference.
3. Help for Students
If you are a parent in further or higher education, then you may be able to get help paying for childcare whilst you study.
Sixth Form College Childcare Scheme
For parents aged 20 or over studying at a school sixth form or sixth form college. The amount you can receive depends on your household income, but typical weekly amounts are up to £160 per child outside London, and £175 per child if you live in London. To find out more, call the Learner Support helpline on 0800 121 8989.
Care to Learn Scheme
For students under the age of 20 studying courses in schools, sixth forms, sixth form colleges and Entry to Employment (e2e) programmes. Care to Learn can pay up to £160 per child per week (£175 in London) to help with the cost of childcare, travelling between home and your childcare provider, registration fees charged by the childcare provider and fees you need to pay during holidays to keep the childcare place open. Contact the Learner Support helpline on 0800 121 8989 for more details.
Discretionary Support Funds
Previously known as Learner Support Funds, these loans (which you need to pay back) and grants (which you do not need to pay back) are prioritised for those who face financial hardship in further education at college or sixth form. They can be used to pay for Ofsted-registered childcare, as well as travel costs, essential course-related equipment, and for financial hardship and emergencies. Speak to your student support or welfare officer for more information.
Childcare Grant
Students in full-time higher education with dependent children may be eligible for a grant to cover as much as 85% of childcare costs during term time and holidays - up to a maximum of £148.75 per week for one child, or £255 per week for two or more children. You can apply for this grant by completing the relevant sections on the main student finance application (i.e. the one used to apply for student loans and grants).
Access to Learning Fund
The Government provides universities and colleges with discretionary funds to help students who face hardship and need extra financial support. The fund is available to full-time undergraduate and postgraduate students, and part-time undergraduate and postgraduate students, as long as their course takes no more than twice as long to complete as an equivalent full-time course, and lasts at least a year. Hardship funds can be used to help pay for students childcare needs. To apply, you'll need to get in touch with your student services department, after you start your course.
Other Options
Other options for students include:
- Free or subsidised childcare places for further education students on low incomes.
- University or college childcare schemes aimed at students, including crèches, nurseries, holiday playschemes, out of school schemes and childminding networks.
4. Help for Working Parents
Childcare Tax Credits
You can get extra tax credits to help with up to 80% of the cost of approved or registered childcare; up to a maximum of £140 a week for one child, and £240 a week for two or more children. In order to qualify for Childcare Tax Credits, you usually have to work for at least 16 hours a week. The actual amount you receive depends on your income - the lower your income, the more tax credits you'll receive.
Childcare Vouchers
If you're employed, then you may be able to discuss with your employer the possibility of receiving childcare vouchers to help pay for childcare costs. These vouchers may be in addition to your salary, or (more commonly) you may be required to make a 'salary sacrifice', thus agreeing to a reduction to your taxable salary, and receiving that amount in childcare vouchers instead.
However, the first £55 per week (or £243 per month) of these childcare vouchers is exempt from National Insurance Contributions (NICs) and from tax. This results in a saving of more than £800 a year for a lower level tax-payer, and as each employed parent can claim the exemptions, a two-parent family could save more than £1,600 or more than £2,000 a year (higher tax bracket).
Childcare vouchers can be used to pay for any form of Ofsted registered or approved childcare, including childminders, nurseries and playschemes, out of hours clubs run by a school on the school premises and childcare given in the child's own home by a nurse or domiciliary worker from an agency registered under the Domiciliary Care Agencies Regulations 2002.
Qualifying childcare does not include care provided by a relative of the child, unless the relative is a registered or approved childcare provider, the care is also provided to non-related children, and the care is provided away from the child's own home.
