DWP £2,000 per child per Year: Many families in the UK can save a lot on childcare costs by using a special government benefit. Parents earning under £100,000, or couples earning less than £200,000 together, are encouraged to apply for the Tax-Free Childcare scheme.
This benefit can save up to £2,000 per child each year, or £4,000 for children with disabilities. With the Easter holidays coming, it is a good time for working parents to open a Tax-Free Childcare account and reduce their childcare bills.
What is Tax-Free Childcare?
Tax-Free Childcare is a government scheme that helps working parents save money on childcare. The government adds money to the amount parents put into a special childcare account. For every £8 parents pay in, the government adds £2 more.
This means parents get extra money to pay for childcare, such as before or after school clubs, childminders, or holiday activity clubs. Parents can save up to £2,000 a year per child, and if the child has a disability, they can save up to £4,000 a year.
Who Can Apply?
- To be eligible for Tax-Free Childcare, families must meet certain conditions:
- Parents must have a child aged 11 or under. For disabled children, the age limit is up to 16 years.
- Both parents (or the single parent) must be working and earning at least the National Minimum Wage or Living Wage for 16 hours a week on average.
- Each parent should earn less than £100,000 per year.
- Families should not be receiving other benefits like tax credits, Universal Credit, or childcare vouchers.
- Parents can check if they qualify and apply for Tax-Free Childcare on the official government website, GOV.UK.
How Does the Scheme Help With Childcare Costs?
With this scheme, every £8 parents pay into their Tax-Free Childcare account, the government adds £2. This means parents can get up to £500 every three months for each child, or £1,000 if the child is disabled.
This money helps pay for childcare, which can include school clubs or childcare providers during holidays. For example, in December alone, the government gave £49.7 million to parents across the UK to help with childcare bills.
Can This Benefit Be Used Alongside Other Free Childcare Hours?
Yes, Tax-Free Childcare can be used along with the free childcare hours offered by the government for children aged nine months and older, depending on eligibility. This makes it easier for parents to save more on childcare costs.
Tax-Free Childcare is a great way for working parents in the UK to save money on the high costs of childcare. If you earn under £100,000 or your household earns less than £200,000, it’s worth checking if you qualify. With government top-ups adding extra money to your childcare account, this scheme can reduce your childcare bills by thousands of pounds each year.
Opening a Tax-Free Childcare account is simple and could make a big difference, especially during school holidays when childcare costs often rise. Remember, eligibility rules apply, so visit GOV.UK to see if you can benefit and start saving today.
FAQ
What is Tax-Free Childcare?
Tax-Free Childcare is a government scheme that helps working parents save money on childcare by adding 20% to the amount paid into a special childcare account.
Who can apply for Tax-Free Childcare?
Parents earning under £100,000 each, or couples earning under £200,000 together, with children aged 11 or under (or up to 16 for disabled children), can apply if they meet other criteria.
Who can apply for Tax-Free Childcare?
Parents earning under £100,000 each, or couples earning under £200,000 together, with children aged 11 or under (or up to 16 for disabled children), can apply if they meet other criteria.
How much money can parents save with Tax-Free Childcare?
Parents can save up to £2,000 per child each year, or up to £4,000 if the child has a disability, with the government adding extra funds to their childcare account.
Can Tax-Free Childcare be used with other childcare benefits?
Yes, it can be used alongside free childcare hours for children aged nine months or older, depending on eligibility.
Where can parents check if they are eligible?
Parents can check eligibility and apply for Tax-Free Childcare on the official government website, GOV.UK.
Does receiving tax credits or Universal Credit affect eligibility?
Yes, parents receiving tax credits, Universal Credit, or childcare vouchers are not eligible for Tax-Free Childcare.
What types of childcare can the money be used for?
The money can be used to pay for approved childcare providers such as before or after school clubs, childminders, and holiday activity clubs.
