Finance guru Martin Lewis is urging families to check if they are owed £2,000. The expert has warned almost a million households could be in line for the cash boost.
According to the MEN, Martin explained the urgency of checking if you're liable for the cash injection. And with families continuing to struggle during the cost of living crisis, it could prove a much-needed lifeline.
"There are 800,000 people in the UK eligible for tax-free childcare, which is effectively where you get 20% off the price of childcare through Gov.uk, the savings scheme there," Martin Lewis explained on The Martin Lewis Money Show. "People aren’t using it so check that out if you’re paying for childcare."
To secure your discount you'll need to set up an online account for your child on the UK Government's website. Then for every £8 you pay into this account the government will pay in £2 to pay your provider. You can use this benefit at the same time as your 30 hours of free childcare if you’re eligible for both.
You can get up to £500 every three months (up to £2,000 a year) for each of your children to help with the costs of childcare. This goes up to £1,000 every three months if a child is disabled (up to £4,000 a year).
Childcare can be childminders, nurseries and nannies, plus after-school clubs and play schemes. But your childcare provider must be signed up to the scheme before you can benefit from it. Check with them to see if they're already signed up.
Children should be 11 or under and usually live with you. Adopted children are eligible but foster children aren't.
Your eligibility depends on:
- If you are working
- Your income (and your partner’s income, if you have one)
- Your child’s circumstances
- Your immigration status
You can usually get tax-free childcare if one of you and your partner are working, on sick leave or on parental leave. If you are not working but your partner is, you may still be eligible. Over the next three months you and your partner must each expect to earn at least:
- £1,976 if you’re aged 23 or over
- £1,909 if you’re aged 21 or 22
- £1,420 if you’re aged 18 to 20
- £1,000 if you’re under 18 or an apprentice
This is at least the National Minimum Wage or Living Wage for 16 hours a week on average. To be able to claim the benefit you must be a British or Irish citizen, have settled status in the UK or permission to access public funds.
You cannot get tax-free childcare at the same time as claiming working tax credit, child tax credit, universal credit, or childcare vouchers. But before you apply for tax-free childcare, you should check if you even need to pay for childcare at all. For example parents of three and four-year-olds can apply for 30 hours free childcare a week.
