Martin Lewis' MoneySavingExpert team is urging parents to check if they are eligible to receive £2,000 worth of tax-free childcare.
Families could get a maximum Government top-up of £500 every three months to help with childcare bills. It means parents could receive a yearly maximum of £2,000 in childcare payments, or £4,000 if your child has a disability.
The way the scheme works is, for every 80p you put into your online tax-free childcare account, the Government will add 20p. For example, for every £8 paid in, families will get an automatic £2 top-up from the Government, bringing the total to £10.
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The MoneySavingExpert team says this "essentially gives you basic-rate tax back on your bill". The support is available for children aged up to 11, or 17 if the child has a disability, and thousands of families are being warned they could be missing out on the cash, reports The Mirror.
MSE has urged parents and carers across the country to check their eligibility and register for tax-free childcare via GOV.UK.
Who can get this money?
There's a list of eligibility criteria you’ll need to meet to benefit from the scheme. Your child must be aged under 11, or 17 if they have a disability, to use the scheme.
If you - and/or your partner - are in work, on sick leave or annual leave, or are on shared parental, maternity, paternity or adoption leave, you may be entitled to help. If you’re not working but your partner is, you may be be entitled to help if you receive one of the following benefits:
- Incapacity Benefit
- Severe Disablement Allowance
- Carer’s Allowance
- Contribution-based Employment and Support Allowance
You also must be earning at least £1,853.28 over the next three months, which is the National Living Wage for those over 23. If you have a partner, they must earn this too. You won’t be able to get tax-free childcare if you claim Working Tax Credit, Child Tax Credit, Universal Credit or childcare vouchers.
How do I claim?
You'll need to head over to the gov.uk website to set up an account. The sign up process requires some personal information, including your National Insurance number or Unique Taxpayer Reference number if you are self-employed. If you have a partner, you’ll have to provide their details too.
You’ll then be assessed to see if you meet the eligibility requirements to receive help, and this can take up to seven days.
It takes around 20 minutes to apply altogether. If successful, you’ll have set up your own online account. For every £8 you pay into that account, the Government will top up an extra £2 to pay to your childcare provider. As well as this scheme, it also helps to check if you’re eligible for child care credits, the Sure Start grant or child benefits.
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