Childcare Credit in Working Tax Credit
If you receive Working Tax Credit an amount for childcare costs can be included when calculating your award. From April 2006, you can receive up to a maximum of 80% of £175 for one child, and £300 for two or more children.
This applies to you if:
- you are a lone parent working at least 16 hours a week, or
- you are part of a couple and you both work 16 hours or more a week, or
- you are part of a couple where one of you works at least 16 hours a week and the other partner is sick, in hospital, or in prison
If you are a mother on paid maternity leave, you can also get help with childcare costs for your baby.
To qualify for childcare costs, the childcare must be from registered childminders, nurseries, after-school clubs, holiday play-schemes or from approved childcare in your own home. It is for children up to the September after their 15th birthday, or after their 16th birthday if they are disabled, getting Disability Living Allowance or registered blind.
If your childcare costs stop or go down by more than £10 a week for four weeks in a row, you must report this change within 3 months (before November 2006) or within 4 weeks (from November 2006). You may face a penalty charge if you do not report the change. A decrease in the money you receive will take effect from the first week after four weeks of the change.
Housing Benefit and Council Tax Benefit
The local authority can ignore registered or approved childcare costs when working out your Housing Benefit or Council Tax Benefit, up to £175 a week for one child or £300 a week for two or more children (April 2006 - April 2007).
Study and childcare
A wide range of funds is available, for example:
- Care to Learn for young parents (age under 19)
- Career Development Loan (CDL)
- Educational trusts and charities
- Childcare support funds
- New Deal for Lone Parents
- Childcare Grant Package
- NHS childcare allowance
For a checklist about studying and help with childcare costs, check with learndirect (external website).
New Deals
The New Deal for Lone Parents and the New Deal for Partners include this help:
- Childcare subsidy , worth up to £67 a week for one child, or £100 for two or more children (April 2005 - April 2006), when you do part-time work, under 16 hours a week for lone parents, or under 24 hours a week for partners.
- Childcare Assist, for childcare costs for the first week when you move into work of at least 8 hours a week. This is new, from 25 April 2005.
Get advice from your Personal Adviser at Jobcentre Plus.
Free nursery education places for 3 and 4 year olds
Local authority schools provide free places for three and four year olds. In addition, free nursery education places are available in private or voluntary day nurseries and pre-school groups. These settings provide educational activities for children for five, two and a half hour sessions a week, for eleven weeks a term.
Get more details from the Manchester Children's Information Service (external website).
Childcare Vouchers or Salary Sacrifice
Childcare vouchers of up to £55 a week (April 2006 - April 2007) are a new way for employers to help their employees with the costs of childcare. The employer needs to sign up with a childcare voucher company and you, as the employee, need to choose to sacrifice part of your salary to get the vouchers. You need to check that your childcare provider will accept the vouchers.
Childcare vouchers are exempt from tax and National Insurance Contributions, so they can help you to save money. But, it is important to note that if you can get help with childcare costs through Working Tax Credit, you might be worse off under a voucher scheme. And, it may affect your future entitlements, for example to Statutory Maternity Pay or other benefits. Please get advice.
For copies of Manchester Children's Information Service (external website) information sheets on childcare vouchers call 0800 083 7921 (Manchester residents).
Need more help? Live in Manchester? Send us an email or book an appointment with the Online Adviser
Information on other websites
Direct Gov
Information about childcare and childcare benefits
National Union of Students
Information on financial support including help with childcare costs
Daycare Trust
Information for parents on paying for childcare, including childcare vouchers
Need more help? Live in Manchester? Send us an email
Information Provider:
Manchester Advice
Date Reviewed:
17 August 2006
This information is for guidance only and is not an authoritative statement on the law. Please read our Terms and Conditions.
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