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FINANCIAL HELP WITH CHILDCARE FOR LOWER-INCOME FAMILIES
If you are a working parent, you could be entitled to help from the government with your childcare through the Working Families Tax Credit (WFTC) and Childcare Tax Credit. There are other government schemes to help you if you are in or out of work and if you have a child dependent on you. You should be aware of all your entitlements.
- Child Benefit
- Working Families Tax Credit
- Childcare Tax Credit
- Surestart Maternity Grant
- Social Fund Payments
- New deal for Lone Parents
Child Benefit is payable to anyone bringing up a child under the age of 16. Parents of children studying full time under the age of 19 also qualify. It is paid at the same rate to all families regardless of income or hours worked. It is currently £15.50 a week for the first child and £10.35 for each other child (from April 2001).You can claim as soon as your child is born - and it is important to do so as they do not allow for back dated benefit.
What is it: Government initiative introduced in October 1999 to replace the existing Family tax Credit. The aim is to provide an earnings top-up for low-income households. You should be able to get help with the costs of paying a childminder or nursery through the Childcare Tax Credit (CTC).
Who administers it: Up until April 2000, Working Families Tax Credit was administered by the Inland Revenue. From April 2000, employers have taken over paying WFTC through wage packets. The Inland Revenue will supervise and ensure that the right payments are made on time. The Inland Revenue will still pay those who are self-employed and couples where the partner who is claiming is either self-employed or not working.
How much: There are four elements to it: a £52.30 basic tax credit per family; an extra credit of £11.05 if one parent works more than 30 hours a week: tax credits for each child, starting at £25.60 (from Oct 2000); and a childcare tax credit paying up to 70 per cent of childcare costs.
The WFTC guarantees a minimum income of £207 a week to low-income families, rising to £214 a week from April next year.
If you work more than 16 hours a week and earn less than £17,000
a year, you can qualify for 70% of your weekly childcare bills to a maximum
of £100 for one child and £150 for two or more. However, if
you earn more, your housing benefit will be withdrawn.
The benefit lasts up to 26 weeks, after which you must re-apply. If it
is renewed, it stays the same even if you earn more or less.
To qualify, you must:
- Have at least one child in registered childcare (registered childminder,
nursery, out-of-school club or playgroup. Nannies and grandparents do
not count).
- Be working at least 16 hours a week (both partners if you are a couple),
whether you are employed or self-employed.
- Have savings of £8,000 or less.
- Be resident in the United Kingdom
- Have a gross income of less than £17,000 (with one child in childcare) or less than £34,000 combined income (with two or more children in childcare).
Claimants need to take into account all their income, potential income,
childcare costs and any other expenses such as travel costs. You should
have all your wage slips from the past six months. If you are self-employed
you should have a record of all employment and expenses.
You need to be individually assessed to see if you qualify. Some families
get just a few pounds; others get more than £100 a week.
Those who cannot apply
Those who pay relatives to care for their children (unless the relative
registers as a childminder).
Parents who employ nannies in their own homes are also ineligible for
CTC because nannies are unregistered.
Childcare Tax Credit (CTC) is part of the Working Families Tax Credit. It is aimed at low-income parents and allows them to work at the same time. Low-paid working parents, often lone mothers, qualify for CTC to pay for childcare while they work
To Qualify you must:
- Be under the WFTC or Disabled Person's Tax Credit.
- Work more than 16 hours per week or are in a couple where you both
work 16 hours or more hours per week or in a couple where one partner
is incapacitated.
- Have at least one child in registered childcare (registered childminder,
nursery, out-of-school club or playgroup. Nannies and grandparents do
not count).
- Have child(ren) who is/are under 15.
You can claim up to 70% of the cost of a childminder, nursery, out-of-hours clubs on school premises and childcare schemes, such as hospitals. The maximum you can claim for childcare is £100 for one child and £150 for two or more children.
How much: Childcare Tax Credit is part of Working Families Tax Credit. The amount you get depends on the amount spent on registered on childcare, the number of children under 15 under registered childcare and your income.
You could get up to £70 a week if you have one child in childcare and up to £105 a week if you have two or more children in childcare. The maximum amount you can receive is up to 70% of the amount you spend on childcare.
This is paid to low-income mothers provided they meet a basic requirement of health check-ups for their children. It is currently worth £300 (as of autumn 2000). It is a one-off payment, designed to give new parents extra money to buy essential items for their new baby. It has been in place since April 2000, replacing the maternity payment.
This is aimed at helping low-income mothers with the cost of equipment for new babies. You qualify if you or your partner are getting Income Support, income-based Jobseeker's Allowance, Family Credit or Disability Working Allowance. You can claim from eleven weeks before your baby is due until three months after the birth.
This is a recent initiative for lone parents bringing up a child and receiving Income Support. It aims to get people back into work or training. You can get advice on jobs and training, benefits, find out about childcare, help with working out how much you need and so on.
Any lone parent with a dependent child making a claim for or receiving Income Support is eligible to join the scheme.
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