There are several types of financial support available to help you pay for registered childcare, which scheme you’re better off with depends on your situation.
Universal Credit is the new single, monthly payment for people who are on a low income or are out of work. Universal Credit replaces Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment Support Allowance (ESA) and Working Tax Credit.
All new claimants will access Universal Credit in Wrexham. If you are currently on other benefits these will be replaced by Universal Credit in the next few years, but you may also be transferred over to Universal Credit sooner if you report a change in your circumstances.
You can use a benefits calculator (external link) to work out how much you may be entitled to.
Child Tax Credit is available for families with children whether or not you are in work. The amount you receive is based on your annual income and will decrease as your income rises. This may be used to cover childcare costs but is not specifically a payment for childcare.
Working Tax Credit supports working people (employed or self-employed) on low incomes. You must be working 16 hours as a single person or 24 hours between you if you are part of a couple, with one of you working a minimum of 16 hours. The amount you receive is based on your annual income and will decrease as your income rises.
The Childcare Element of the Working Tax Credit can help towards the costs of registered or approved childcare if you’re eligible. The amount you receive is dependent on the household income and your childcare costs. You may be better off using childcare vouchers if your income is high.
If you’re a new claimant you’re unlikely to be able to apply for tax credits and will need to apply for Universal Credit instead.
The Tax-Free Childcare scheme is available for all working parents (including self-employed) with children under the age of 11 (17 for children with a disability) and doesn’t rely on your employer offering a scheme. The government will top up the amount you pay into your Tax-Free Childcare account.
You cannot get Tax-Free Childcare if you’re already receiving Universal Credit/Tax Credits or childcare vouchers.
The childcare voucher scheme is no longer open for new families to join.
If you’re already accessing childcare vouchers you can continue to access them for as long as your employer continues to offer them. You must tell your employer within 90 days if you get Tax-Free Childcare as you can no longer claim childcare vouchers (however you can continue to use any vouchers you already have, including to make a joint payment for childcare with Tax-Free Childcare).
The Money Advice Service provides practical hints and tips to help you make your money go further, as well as a budget planner to help you manage your money.
Confidential, practical advice and support with debt issues can be provided by the Citizen’s Advice Bureau. You can call their national phone service ‘Adviceline’ on 03444 77 20 20, or their Wrexham branch on 0300 330 1178.