Almost all working families are entitled to support with the cost of childcare either through Tax Free Childcare, Working Tax Credits or Universal Credit.
Working Tax Credit (WTC) and Child Tax Credit (CTC) are being replaced by Universal Credit. In North Lincolnshire new applicants have been claiming Universal Credit since June 2015. Families currently receiving Working Tax Credit and/or Child Tax Credit are being moved across to Universal Credit gradually, and you will receive a letter from HMRC informing you of when you will be moved across.
Childcare help under Working Tax Credit
You are eligible to claim the childcare element of Working Tax Credit if:
- you are eligible for Working Tax Credit
- you are a single parent and work at least 16 hours per week
- you have a partner and you both work for at least 16 hours per week
- one of you works for at least 16 hours per week and the other partner is in hospital, in prison or entitled to certain benefits
- you are on sick leave or maternity/paternity leave from your normal paid work
The amount of help you can get with your childcare costs through the childcare element of Working Tax Credit depends on your income, but can be a maximum of 70 per cent of your total costs. There is a cap on the maximum amount you can receive.
If you would like to claim the childcare element of Working Tax Credit (WTC) you can complete the relevant section of the WTC claim form when you first apply. If you already receive WTC but now wish to claim the childcare element you will need to contact the WTC helpline on 0345 300 3900. You will need to provide them with the OfSTED registration number of your childcare provider and the amount you pay weekly for childcare. If you use more childcare during school holidays for example, remember to work out the average amount it costs you over the year.
You cannot claim for any hours of childcare that are already paid for by your employer (through childcare vouchers, for example) or by the council for a free education place for a two, three or four year old.
You will need to inform HMRC if you change childcare providers, your childcare costs fall or rise and of any other change that will affect your eligibility for Tax Credits such as changes to your income or moving in with a partner.
Childcare costs and Universal Credit
You can get help with childcare costs if you get Universal Credit (UC) and:
- you work (there are no minimum hours)
- childcare is used to allow you to go to work
The amount of help you will get depends on your income up to a maximum of 85 per cent of your childcare costs or a maximum of £646 per month for one child or £1108 per month for two or more children.
- It is important to note that you cannot claim more help to cover higher childcare costs during school holidays for example. Unlike with Working Tax Credit, childcare costs are not averaged out over the year.
- Unlike WTC, childcare payments under Universal Credit are paid in arrears so you will have to pay your childcare costs up front and then claim them back. You will have to make your claim within a fixed period of time and the payment will then be made along with your next UC payment.
- You can claim help with childcare costs under UC until 31 August following your child’s 16th birthday.
If you are looking to return to work or training, support might be available from your local Jobcentre Plus.