Menu
Save, make, understand money

Household Bills

Parents who top or lag income limit for childcare help will still be eligible

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
05/08/2020

Parents whose incomes have been impacted by the coronavirus will still be eligible for government-funded childcare until the end of October, it has confirmed.

Working parents or carers ordinarily eligible for Tax-free childcare or 30 hours free childcare but whose incomes have temporarily fallen below the threshold due to coronavirus, will continue to receive financial support.

And for critical workers whose incomes may exceed the 2020/21 tax year requirements, they too will continue to be eligible for the schemes, the government confirmed.

In April, YourMoney.com revealed that parents who benefit from 30 hours free childcare would no longer qualify for the scheme if they experienced a fall in income as a result of the coronavirus crisis.

However, parents who receive Tax-Free Childcare – it comes under HMRC’s remit – and who were suffering financially as a result of the pandemic would still be eligible.

This discrepancy was resolved as the Department for Education (DfE) confirmed in May that parents who were previously eligible for the 30 hours free childcare scheme would continue to qualify during the summer term, even if their income has fallen below the minimum requirement or they have lost their job.

And today the threshold relaxation for both schemes has been extended until 31 October 2020.

HMRC’s deputy chief executive and second permanent secretary, Angela MacDonald, said: “HMRC has been providing vital financial support to families during a time when it has been needed most and we will continue to help them as they gradually transition back to a normal life.

“We want to make sure families will not be adversely affected by any abrupt change in circumstances, which is why we have extended available support through Tax-Free Childcare to give families that extra boost.”

DfE’s children’s minister, Vicky Ford, said: “Our 30 hours childcare offer has always been about supporting parents back into work, and in these times, this ambition is now more important than ever. That is why we are again extending eligibility for the government’s childcare offers so that no parent loses out because of a fall in income due to coronavirus.

“This builds on our significant financial support for the early years sector – who have been so integral to the UK’s recovery from this pandemic. We are continuing to provide longer term reassurance to nurseries and childminders that are open by ‘block-buying’ childcare places for the rest of this year at the level we would have funded before coronavirus, regardless of how many children are attending.”

Through Tax-free Childcare, families receive a £2 government top-up for every £8 they pay into their child’s account, up to the value of £2,000 per child, or £4,000 per disabled child in financial support. The money can be used towards the cost of qualifying childcare for a child up to the age of 11, or 17 for a disabled child.

The 30 hours free childcare is available to eligible 3 to 4-year-olds in England.

To continue receiving the financial support for Tax-Free Childcare and 30 hours free childcare, parents need to reconfirm their eligibility every three months.