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‘Free’ Childcare for 2-Year-Olds - A Parent Guide

Wrap your head around the new government funding for children in the early years
‘Free’ Childcare for 2-Year-Olds
April 3, 2024
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1. What is the new offer and am I eligible?

The help you can get towards childcare costs depends on the age of your child, and whether you are working, or receiving certain benefits.

Working parents can get:

15 hours free childcare a week for two-year-olds from April 2024

15 hours free childcare for nine-month-olds from September 2024

30 hours free childcare for three and four-year-olds is already available

30 hours free childcare for all under-5s from September 2025

To qualify for the new hours, the majority of parents must earn more than £8,670, but less than £100,000 per year.

Those on certain benefits can already get:

15 hours free childcare for two-year-olds

15 hours free childcare for three and four-year-olds

If you are not in work, you might still be eligible for 30 hours of free childcare if your partner works, or you receive certain benefits.

2. When should I apply

You can apply from when your child is:

  • 1 year and 36 weeks for 15 hours free childcare
  • 2 years and 36 weeks for 30 hours free childcare
  • via a single application on the Gov.uk website.

To complete the application, you need to provide your name, address and national insurance number, as well as whether you expect to meet the income requirements/whether you are in receipt of any benefits.

If you live with a partner, you will need to provide their information too. This will enable HMRC to decide whether your child is eligible.

If you are eligible, you will be given an 11-digit code that you will need to take to your early years provider along with your national insurance number and your child’s birth certificate.

Your provider will then use the government’s eligibility checking system to check the code is valid. If it is, they will be able to book your child’s place.

You will need to reconfirm your eligibility every three months and will receive a reminder text message or email before the deadline.

3. How do I reconfirm my eligibility?

HMRC manage the application process and send out two reminders to parents about the need to reconfirm their eligibility – four weeks and two weeks before the reconfirmation deadline. If parent’s details have not changed, they only need to tick a box in their childcare service account to confirm their details remain the same.  A message will also be sent to let parents know they are no longer eligible if the deadline is not met – personal eligibility codes do not change over a period of time even if an application ends and a new application is submitted.

4. If my circumstances change will I automatically lose my funding?

If a parent’s circumstances change and they are no longer eligible for the additional 15 hours of free childcare, a ‘grace period’ will apply so that children can continue with their free place for a short period of time, whilst alternate arrangements can be made. If during this grace period you should become eligible again, you can simply reapply.

If you are no longer eligible, you can still access the 15-hour universal early education entitlement for 3 and 4-year-olds.

5. How soon after my child’s birthday can I access these schemes?

Currently, children become eligible for funded early education and childcare the term following the relevant age.

6. Is the funding completely free?

Yes – sort of. Your child's place of up to 30 hours funding per week will be completely free of charge to you – all money is paid directly from the council to the childcare provider where your child has a place, although the funding only covers the actual care and education of your child (see below). Childcare providers can also charge a refundable deposit for their funded places for two, three, and four year olds – individual local councils decide when providers refund the deposits, which should be within a reasonable time scale.

7. Can nurseries ask for top-up fees?

Providers are not permitted to charge ‘top-up’ fees (the difference between your fees and the hourly rate you receive from your local authority), although they are permitted to charge for meals and snacks, as well as for other consumables such as nappies and sun cream. Providers can also charge for additional activities and services such as outings and trips; activity classes, pick-ups and drop-offs and for being ‘on-call’ when a child is at another setting. However, parents must have the choice of whether or not they wish to purchase additional activities and services, and these charges cannot be a condition of taking up a funded place.

8. If I’m not eligible for the 30-hour offer, can I still get my 15 hours?

If your child is three or four and you don’t meet the criteria for the 30 hours free funded childcare, you will still be eligible for the 15-hours offer as this is universal.

If your child is two and you don’t meet the criteria for the funded scheme for working families, then you will only be eligible for 15 hours if you are in receipt of certain benefits (listed below).

If your child is under two and you don’t meet the criteria for the funded scheme for working families, then you will not be eligible for any funded care and education.

  • Income Support
  • income-based Jobseeker’s Allowance (JSA)
  • income-related Employment and Support Allowance (ESA)
  • Universal Credit, and your household income is £15,400 a year or less after tax, not including benefit payments
  • the guaranteed element of Pension Credit
  • Child Tax Credit, Working Tax Credit (or both), and your household income is £16,190 a year or less before tax
  • the Working Tax Credit 4-week run on (the payment you get when you stop qualifying for Working Tax Credit)

A child may also be eligible if they:

  • are looked after by a local authority
  • have an education, health and care (EHC) plan
  • get Disability Living Allowance
  • have left care under an adoption order, special guardianship order or a child arrangements order

9. I’m a full-time apprentice – Am I eligible for the 15/30 hours free childcare?

Yes.  As long as you meet the earnings threshold. To be eligible for 15/30 hours free childcare for two, three or four year olds, you and any partner must each expect to earn the equivalent of working 16 hours a week at national minimum or living wage – depending on your age.

10. Do nurseries have to offer funded places?

No. Offering funded places is not compulsory.

Providers who opt-out of the 30-hour scheme can still deliver the universal 15-hour offer.

Providers are also entitled to offer a limited number of funded places. The provider is allowed to adjust the number of funded places available to fit their business.

11. Can I spread my 30 hours entitlement across more than one childcare provider?

You can split your funded entitlement between more than one provider, though no more than two sites in one day. If you are splitting your offer between providers, you will need to provide your eligibility code and information to each provider.

12. Do both parents need to be working to get the 15 and the 30 hours free childcare?

The extended entitlement is available to families where:

  • both parents are working (or the sole parent is working in a lone parent family)
  • each parent earns on average a weekly minimum equivalent to 16 hours at the National Minimum wage or 16 hours at National Living Wage.
  • neither parent has an income of more than £100,000 per year
  • both parents are employed but one or both parents is temporarily away from the workplace on parental, maternity or paternity leave, adoption leave or get statutory sick pay
  • one parent is employed, and one parent has substantial caring roles based on specific benefits received for caring, or is disabled/ incapacitated based on receipt of specific benefits

13. Are there any other ways I can reduce the additional cost of chargeable childcare?

If you are paying for chargeable hours in addition to your free early education entitlement there are schemes to assist with these costs:

Tax-Free Childcare

Tax-free childcare is a government scheme to help working families with their childcare costs.

Parents can open an online childcare account to pay their registered childcare providers directly. For every £8 a parent pays into their account, the government will add £2.

To apply, you (and a partner) should:

  • Be 16years old or over
  • Be employed or self-employed
  • Earn at least £139 a week and not more than £100,000 per year per parent (only one parent must be working in a lone-parent family)
  • Not be receiving Tax Credits, Universal Credit or childcare vouchers

You need to apply online by setting up a childcare account on GOV.UK:

You can do this at the same time as applying for the 30 hours of free childcare for three- and four-year-olds

You must reconfirm your eligibility/details every three months (you will receive a reminder message)

Universal Credit for Childcare

If you are working, Universal Credit can help with the costs of childcare – not depended on the number of hours you work.

You may be able to claim up to 85 per cent of your childcare costs if you’re eligible for Universal Credit and meet some additional conditions. The amounts you can receive in childcare costs are:

  • a maximum of £646.35 per month for one child
  • and a maximum of £1,108.04 per month for two or more children

Childcare support is currently paid in arrears. This means that you will usually pay the costs yourself, and Universal Credit will then pay you some of that money back.

You can't claim Universal Credit at the same time as:

  • Tax credits
  • Tax-Free Childcare

14. Who should I contact if I need additional support?

The government childcare eligibility website has some extra information on subjects such as immigration status and information on the schemes available in Scotland, Wales (guide available in Welsh – Cymraeg), and northern Island.

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