Funded Childcare for Working Parents.

The cost of childcare can be a major barrier for parents returning to work or increasing their working hours. Government-funded childcare schemes are intended to reduce those costs and give young children access to early education and care.

In England, eligible working parents can now receive up to 30 hours of funded childcare each week from the term after their child reaches nine months old until the child starts school.

How Many Funded Hours Are Available?

Eligible working parents can receive up to 30 hours of funded childcare a week for 38 weeks of the year.

This is equivalent to 1,140 funded hours annually. Some childcare providers allow parents to use fewer hours each week and spread the entitlement across more than 38 weeks. This is sometimes called stretching the entitlement.

A provider does not have to offer stretched hours. The arrangement will depend on its opening times, available places and funding agreement with the local authority.

Which Children Qualify?

The working-parent entitlement applies from the term after a child reaches nine months old until they start school.

The exact start date depends on the child's age, when the application is made and the relevant school term.

Parents should apply before the applicable deadline because missing it can delay the start of funded childcare until the following term.

Who Is Eligible?

Parents will normally need to be working or starting work and expect to earn at least the prescribed minimum amount during the relevant period.

Where parents live together, both will normally need to satisfy the employment and earnings conditions unless an exception applies.

Eligibility may continue where a parent is:

• On annual leave or sick leave
• On maternity, paternity or adoption leave
• Receiving shared parental leave
• Receiving statutory neonatal care pay
• About to start a new job
• Temporarily absent from work in specified circumstances

Different rules may apply where one parent is working and the other receives certain disability or caring benefits.

The Minimum Earnings Requirement

Each working parent must normally expect to earn at least the equivalent of 16 hours a week at the applicable National Minimum Wage or National Living Wage.

The calculation is based on expected earnings rather than requiring the parent to work exactly 16 hours every week. This can allow people with irregular hours or self-employed income to qualify.

Special rules may apply during the first year after someone starts a self-employed business.

The Maximum Income Limit

A parent will not normally qualify where their expected adjusted net income exceeds £100,000 during the relevant tax year.

Where parents are a couple, the £100,000 limit applies separately to each person rather than to their combined household income.

Adjusted net income can differ from headline salary because it may take account of matters including pension contributions, benefits and other taxable income.

Universal 15 Hours for Three- and Four-Year-Olds

All three- and four-year-olds in England are generally entitled to 15 hours of funded early education each week for 38 weeks of the year, regardless of whether their parents work.

Eligible working families receive a further 15 hours, producing the total entitlement of up to 30 hours.

The universal entitlement usually begins from the term after the child's third birthday.

Funded Childcare for Families Receiving Additional Support

Some two-year-olds and younger children may qualify for 15 funded hours because the family receives particular benefits or the child has additional needs.

Eligibility can include circumstances involving:

• Specified means-tested benefits
• Education, Health and Care Plans
• Disability Living Allowance for the child
• Children looked after by a local authority
• Children who have left care under certain court orders

The local authority can confirm whether a child qualifies under the additional-support rules.

Does "Funded" Mean Completely Free?

The government funding covers the agreed childcare hours. Still, it does not necessarily cover every service or item provided by the nursery, childminder or other setting.

A provider may charge separately for optional extras such as:

• Meals and snacks
• Nappies
• Special activities
• Trips
• Additional hours outside the funded entitlement
• Transport

Providers should make their charging arrangements clear before a place is accepted.

They should not make access to the funded hours conditional on purchasing unnecessary extras. Reasonable alternatives should normally be considered where a parent does not wish to pay an optional charge.

Can a Nursery Charge a Registration Fee?

A provider may have general registration or administration charges. Still, it should not charge parents simply for accessing the funded entitlement in a way that effectively converts the funded hours into paid childcare.

Parents should ask for a written breakdown showing:

• Which hours are funded
• Which hours must be paid for
• What additional services are included
• Which charges are optional
• Whether deposits are refundable

A concern about compulsory charges can be raised with the provider and, if necessary, the local authority responsible for administering the funding.

Do All Providers Have to Offer 30 Hours?

No. Nurseries, childminders and other early-years providers can decide whether to participate in the funded childcare scheme and how many funded places they can offer.

A provider may offer fewer than 30 hours, restrict funded sessions to particular days or combine funded and paid hours.

Parents may sometimes divide their entitlement between more than one approved provider, subject to local arrangements and the maximum number of funded hours.

What Types of Childcare Can Be Used?

The funded hours must be used with an approved participating provider. This may include:

• Day nurseries
• Pre-schools
• Registered childminders
• Nursery classes attached to schools
• Independent schools participating in the scheme
• Some approved out-of-school or holiday providers

The provider must be registered or approved under the applicable early-years rules and must have an agreement with the local authority to deliver funded places.

How to Apply

Working parents normally apply through the government childcare service.

If the application is successful, they receive an eligibility code which must be given to the childcare provider together with the required personal details.

The provider and local authority then validate the code before confirming the funded place.

Parents should not assume that receiving a code guarantees that their preferred nursery or childminder will have a place available.

When Should Parents Apply?

Parents can usually apply before the child reaches the eligible age. The government service provides application windows and deadlines for each school term.

Applying early gives more time to:

• Resolve eligibility problems
• Find a participating provider
• Agree attendance patterns
• Arrange additional paid hours
• Confirm any extra charges

A parent returning from family leave or starting a new job should check the special application rules applying to their return date.

Reconfirming Eligibility

Parents must normally reconfirm their details and continued eligibility every three months.

The childcare account should indicate when reconfirmation is due. Failing to reconfirm can cause the eligibility code to expire.

Parents should update the account where there is a change in employment, income, relationship status or other relevant circumstances.

What Is the Grace Period?

A child does not normally lose their place immediately if the family temporarily stops meeting the working-parent conditions.

A grace period may allow the funded place to continue for a limited time, allowing the parent to return to qualifying employment.

The end date will depend on when eligibility was lost and the child's circumstances. The local authority or childcare account should confirm the date.

What If the Application Is Refused?

A parent should check that the application contains correct information about employment, income, National Insurance numbers and the child's details.

Where the decision still appears wrong, the parent may be able to ask HMRC to review the decision.

Evidence may include:

• Payslips
• Employment contracts
• A job offer or start date
• Self-employment records
• Benefit decisions
• Evidence of statutory leave

Parents should act promptly because childcare deadlines may pass while the dispute is being considered.

Tax-Free Childcare

Eligible families may be able to use Tax-Free Childcare alongside the funded hours.

Under Tax-Free Childcare, the government contributes towards childcare costs paid through an online account, subject to the scheme limits and eligibility conditions.

The account can be used to pay for approved childcare outside the funded entitlement, including additional nursery hours, childminders, holiday clubs and after-school care.

Tax-Free Childcare cannot normally be claimed at the same time as childcare support through Universal Credit or tax credits.

Universal Credit Childcare Costs

Working parents receiving Universal Credit may be able to recover a percentage of eligible childcare costs, subject to monthly limits.

This support can be used for paid childcare outside the funded entitlement.

Parents should compare the available schemes before choosing between Universal Credit childcare support and Tax-Free Childcare, as the most beneficial option will depend on income and childcare costs.

Problems Finding a Place

The legal entitlement to funded hours does not necessarily guarantee a place with a particular provider or at the exact times a parent requires.

Availability can be affected by:

• Local demand
• Staffing levels
• The child's age
• The number of participating providers
• The days and hours requested
• Additional support needs

Local authorities must provide information about childcare available in their area and may be able to assist families having difficulty finding a suitable place.

Children With Special Educational Needs or Disabilities

Childcare providers must not unlawfully discriminate against disabled children and may have a duty to make reasonable adjustments.

Additional funding or support may be available, including the Disability Access Fund and local inclusion funding.

Parents should discuss the child's needs with the provider and local authority before the placement begins so that support and reasonable adjustments can be considered.

Can a Provider End a Funded Place?

A provider may be able to end a place in accordance with its contract and policies, for example where the setting closes, the arrangement is no longer workable, or the parent repeatedly breaches reasonable terms.

However, a provider should not end or restrict a place unlawfully because of disability, race, religion or another protected characteristic.

Parents should ask for the reasons in writing and check theprovider'ss complaints procedure and local authority funding agreement.

Concerns About Funding Levels

Early-years providers have repeatedly raised concerns that government funding does not always reflect the full cost of providing childcare, particularly after increases in wages, rent, food, energy and regulatory costs.

Providers may attempt to remain financially viable by limiting funded places, charging for optional extras or increasing the price of additional hours.

Parents should receive clear information about charges, while providers must comply with the conditions attached to public funding and consumer law.

Childcare in Scotland

Scotland provides up to 1,140 hours of funded early learning and childcare each year for all three- and four-year-olds and eligible two-year-olds.

The entitlement is not restricted to working parents. Local authorities determine how places are delivered through council nurseries, partner providers and childminders.

Childcare in Wales

Eligible working or studying parents of three- and four-year-olds in Wales can receive up to 30 hours a week of combined nursery education and childcare.

The total consists of at least 10 hours of nursery education and up to 20 hours of funded childcare during term time. Eligible families can also receive holiday childcare, with the offer operating for up to 48 weeks each year.

Childcare in Northern Ireland

Northern Ireland operates a funded Pre-School Education Programme for children in the year before compulsory primary education.

The programme is being standardised progressively towards full-time provision of 22.5 hours a week. The availability of full-time provision will depend on the setting and stage of the expansion.

Separate assistance with childcare costs may be available through schemes including the Northern Ireland Childcare Subsidy Scheme, Tax-Free Childcare and Universal Credit.

Getting Advice

Parents should contact their local authority's Family Information Service or early-years team where they need help finding a provider, understanding additional charges or checking a child's entitlement.

HMRC can assist with applications, eligibility codes, reconfirmation and reviews of working-parent childcare decisions.

Legal advice may be appropriate where there are concerns about discrimination, disability support, misleading charges or a public authority's failure to follow the applicable rules.

Important Information

Solicitors.com is not a firm of solicitors. This article is provided for general information only and does not constitute legal, benefits or financial advice. Childcare schemes, eligibility requirements and funding rules may change and differ across the UK. Their application will depend on the family's circumstances and the childcare provider. You should obtain current advice from the relevant government service, local authority or a suitably qualified solicitor before taking or refraining from action.