MARTIN Lewis’ MoneySavingExpert has warned hundreds of thousands of parents could be missing out on up to £2,000 in free childcare every year.
But many households might not know they can get up to £500 every three months through the government’s tax-free childcare scheme.
That adds up to a maximum of £2,000 a year – rising up to £4,000 a year if your child has disability.
But the team at MoneySavingExpert (MSE) are warning that thousands of families are missing out on the cash.
Parents and carers are being urged to check their eligibility and register for Tax-Free Childcare via GOV.UK.
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The scheme is designed so that for every 80p you put into your tax-free childcare account, the state will add 20p.
MSE say this “essentially gives you basic-rate tax back on your bill.”
So, for example, for every £8 paid in, families will automatically get an additional £2 in government top-up.
It is available for children aged up to 11, or 17 if the child has a disability.
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We explain who is eligible for the help and how to apply.
Who can get the help?
Your child must be aged under 11, which rises to 17 if they have a disability, to use the scheme – and there is other eligibility criteria you have to hit too.
You can usually get the help if you – and your partner, if you have one – are in work, on sick leave or annual leave, or are on shared parental, maternity, paternity or adoption leave.
If you’re not working, you may be eligible for the help if you get one of the following benefits, and if your partner is still working:
- Incapacity Benefit
- Severe Disablement Allowance
- Carer’s Allowance
- Contribution-based Employment and Support Allowance
You are also expected to earn over a certain amount over the next three months too.
You’re expected to earn at least £1,853.28, which is the National Living Wage for those over 23. Your partner must earn this too.
How do I apply?
You’ll need to apply on the gov.uk website to set up an online account to start claiming the help.
You will need some personal information to hand – and your partner’s too if you have one – including your National Insurance number or Unique Taxpayer Reference number if you are self-employed.
In your application, you will be assessed to see if you are eligible for the help, which can take up to seven days.
It takes around 20 minutes to apply, so make sure you have some spare time for the application process.
If you are successful, you will have set up your own online account.
How it works is that for every £8 you pay into the account, the government will chip in £2 to pay to your childcare provider.
Other than the Tax-Free Childcare scheme, you should also check if you are eligible for child care credits, the Sure Start grant or child benefits.
Is there any other help available?
Parents of three and four-year-olds can apply for up to 30 hours free childcare a week.
To qualify you must work 16 hours a week on average at the national living or minimum wage and earn less than £100,000 a year.
But keep in mind you’ll need to reconfirm your eligibility every three months.
This is in case your circumstances, such as your income or living situation, have changed.
You can register by creating a childcare account on the Gov.uk website.
Low income families with young children could be entitled to Healthy start vouchers to help you cover the cost of fresh food and drink for your kids – they’re worth £221 a year per child.
And use a benefits calculator to see you’re entitled to help – there’s an estimated £13billion in unclaimed benefits you may be missing out on.
If you don’t have children, don’t worry because you could be eligible for other forms of support.
Around eight million people will receive a £650 cost of living payment targeted at the most vulnerable households.
The payment has been split into two instalments of £326 and £324 and the vast majority of the eight million eligible should already have received their first portion.
You are entitled to the cost of living benefit if you receive benefits such as Universal Credit or Tax Credit.
The Household Support Fund programme aims to help those struggling with their finances and can’t cover the essentials.
It has recently been extended until the end of this month (September 30, 2022) as millions of people face the ongoing cost of living crisis.
Each council determines how to use its budget to help local residents, with many previously dishing out supermarket and fuel vouchers or one-off cash payments.
Not all residents can receive the support due to eligibility requirements, so it’s best to check your local council’s website.
Over 29 million households are eligible for a £400 energy bill discount.
The discount will be automatic and will be made up of six instalments, starting from October.
Those on credit meters and smart prepayment meters will be paid the £400 discount automatically over a six month period.
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But it’s up to energy firms how they give out the cash directly to their customers.
You can read our guide to find out what your supplier is doing.