HUNDREDS of thousands of parents are missing out on £2,000 per child every year towards care costs.
You can get the help through the government’s tax-free childcare scheme.
Under the scheme, families are given 20p for every 80p they put into a tax-free childcare account, reports MoneySavingExpert.com.
Parents can use it to help pay for up to a maximum £10,000 of childcare per child each year, giving you an extra £2,000 per child.
That goes up to £4,000 a year if your child is disabled.
You can get the help for any type of childcare, although your provider has to be registered with the tax-free childcare scheme.
It also must be registered with a regulator such as Ofsted, the Early Years Register or the Childcare Register.
It is estimated around 800,000 eligible families are not on the scheme and are missing out on free money.
Who is eligible?
Qualifying for the scheme depends on your specific circumstances, however, if you are single and working, including if you are self-employed, you are eligible.
If you have a partner, you usually both need to be in work to qualify.
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However, in certain circumstances, you’re eligible even if you are not working.
These circumstances include if you’re on sick leave, annual leave, shared parental, maternity, paternity or adoption leave, or you or your partner are in work and the other isn’t working and receiving benefits such as incapacity benefit, carer’s allowance or severe disablement allowance.
Your child must also be 11 or younger, and 16 or younger if they have a disability.
You, and if you have a partner, need to be working and earning a minimum of £152 a week and each earning less than £100,000 a year as well.
How does tax-free childcare affect other benefits?
If you successfully apply for tax-free childcare, your Working Tax Credit or Child Tax Credit will stop straight away and you will not be allowed to apply for them again.
You should wait until you get a decision on your tax-free childcare application before cancelling your Universal Credit claim.
The scheme that is best for you depends on your specific situation. You can use the childcare calculator to work out which type of support is best for your family.
How do I apply?
You can apply for the scheme on the government’s website.
You’ll need yours and your partner’s (if you have one) details, including National Insurance (NI) numbers and a Unique Taxpayer Reference (UTR), if you’re self-employed.
The government’s website says the application process takes roughly 20 minutes.
Once you’ve set up an account, to sign in you’ll need a government gateway ID and password.
Only one parent can open an account and you can pay in money via a standing order or by bank transfer.
If you want to make sure you’re adding the correct amount to cover all your childcare costs, you should take your normal bill and multiply it by 0.8.
That gives you 80% of your total bill and the scheme covers the remaining 20%.
That’s based on not surpassing the £2,000 a year cap, or £500 each quarter.