PARENTS will be able to get 30 hours of free childcare and tax-free childcare until October even if their income has dropped due to coronavirus.
The schemes usually require working parents to earn at least the national minimum wage for 16 hours a week for the next three months to qualify.
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For example, someone above the age of 25 would have to earn at least £1,813.76 over three months.
But HMRC has today confirmed eligible parents whose income has fallen as a result of Covid-19 will now continue to receive support until October 31.
Key workers who exceed the maximum income threshold of £100,000 for the 2020/21 tax year for the same reason will also still be eligible.
The 30 hours of free childcare are available to working parents in England with children who are three- and four-years-old.
What help is available for parents?
CHILDCARE can be a costly business. Here is how you can get help.
- 30 hours free childcare – Parents of three and four-year-olds can apply for 30 hours free childcare a week.
To qualify you must usually work at least 16 hours a week at the national living or minimum wage and earn less than £100,000 a year.
- Tax credits – For children under 20, some families can get help with childcare costs.
- Childcare vouchers – If your employer offers childcare vouchers you can get up to £55 a week in tax and national insurance savings.
You pay for your childcare before your tax contributions are taken out.
This scheme is open to new joiners until October 4, 2018, when it is planned that tax-free childcare will replace the vouchers.
- Tax-free childcare – Available to working families and the self-employed, for every £8 you put in the government will add an extra £2.
In January alone, nearly 350,000 children benefited from the 30 hours of funding, according to the Department for Education (DfE).
Roughly 55,000 parents have also applied for the scheme since the start of lockdown restrictions, it added.
Meanwhile, the tax-free childcare scheme gives families a £2 government top-up for every £8 they pay into their child's childcare account.
Parents can get up to the value of £2,000 per child each year, or £4,000 per disabled child each year in financial support.
The money can be used towards the cost of qualifying childcare for a child up to the age of 11, or 17 for a disabled child.
What is the National Minimum Wage?
THE National Minimum Wage is currently the amount workers under 25 (but of school-leaving age) are entitled to.
The National Minimum Wage was re-branded to the National Living Wage in 2016 for those over 25.
Here's the latest National Minimum Wage as of April 2020 that are legally binding:
- 25 and over: £8.72
- 21-24: £8.20
- 18-20: £6.45
- Under 18: £4.55
- Apprentice: £4.15
To receive tax-free childcare or 30 hours of free childcare, parents need to reconfirm their eligibility every three months.
This can be done on the GOV.UK website for both schemes.
If your income has dropped or if it's risen above the threshold, you should apply or reconfirm as usual and HMRC may contact you for further evidence.
Sadly, if you're made redundant you won't be able to apply or reconfirm as you're no longer in work.
If you start employment again and expect to earn above the minimum income requirement after October, you can apply 31 days before you start your new job.
Angela MacDonald, HMRC’s deputy chief executive, said: "We want to make sure families will not be adversely affected by any abrupt change in circumstances, which is why we have extended available support through tax-free childcare to give families that extra boost.”
Vicky Ford, children's minister at DfE, said: "Our 30 hours childcare offer has always been about supporting parents back into work, and in these times, this ambition is now more important than ever.
"That is why we are again extending eligibility for the government’s childcare offers so that no parent loses out because of a fall in income due to coronavirus."
Nurseries were recently told to refund parents who paid for childcare they didn't use during the coronavirus lockdown.
Last year, almost 1.4million families missed out on up to £2,000 a year in tax-free childcare.
We explain ways to cut the cost of childcare – from discounts to community nurseries.
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