What help could you get with childcare costs and how to get tax-free childcare benefits

In this post you’ll find out what government help is available to help with the rising cost of childcare, and how you can access it.

Nicholas Kira

19 April 2024

11 min read


While bringing a child, or children, into the world is undoubtedly a joyous occasion, and raising a child can be an incredibly rewarding experience, there’s no disputing the fact that it comes with its challenges.

And chief among these challenges is childcare costs.

Nursery costs alone could be considered eye-watering, with the average cost for part-time care for under-2s coming in at over £7,000 a year, and full-time care coming in at over £14,000.

Our own research – covering a survey of 2,000 women in the UK – found that more than three quarters (77%) of mothers with children aged under five have seen childcare costs rise over the past 12 months, with a quarter taking on extra work to cover for these increased costs.

And nearly a third (31%) of mums with young children now spend more than 40% of their salary on childcare.

All of this throws the spotlight on the importance of childcare cost assistance, available childcare support, the possibility of claiming tax credits, and – perhaps the most important of all these – eligibility for tax-free childcare.

So, all is not lost – there is help out there.

Just what does this help consist of though?

Well, following an announcement from the Chancellor last March, the Government will initially offer 15 hours of free childcare a week to parents of two-year-olds.

By September 2025, that number is set to rise to 30 hours free childcare a week to all parents with children under the age of five.

Tax-free childcare is also available in the form of a scheme whereby working parents can claim back up to 20% of childcare costs (up to £2,000 per child, per year).

Then there’s Universal Credit too – with the amount available dependent on your individual circumstances and childcare costs.

But we’re now going to delve a little deeper into child benefits, claiming tax-free childcare, child tax credit, and more – so, read on.

Types of Childcare Support

Government schemes

Free childcare hours
In terms of the hours of free childcare that the government has put in place, there’s what’s currently available and what’s coming up in the near future.

Current free childcare hours
At the moment, all parents of children aged three to four years old can access 15 hours of free childcare, regardless of how much they earn or how many hours they work. In addition to this, working parents of two-year-olds can now access 15 hours of free childcare.
In both cases, the carers must work in an official capacity – they can’t simply be a relative or friend.

Future free childcare hours
From September 2024, those 15 hours of free childcare will be extended to all children from the age of 9 months. And, as of September 2025, working parents of children under the age of five will be entitled to 30 hours of free childcare a week.

Tax-free childcare
This is a slightly different scheme than the ones outlined above, in that it allows eligible working parents to claim back up to 20% of their annual childcare costs, up to a maximum of £2,000 per child, per year.

To qualify for this scheme, you’ll need to meet certain eligibility criteria, such as a set number of hours worked per week, but we’ll go into this in more detail further down this post.

Universal Credit
This is a means-tested benefit that may include help with childcare costs for eligible working parents (including those who are self-employed). The amount of support you receive depends on your circumstances – including how much you earn, as a household – and your childcare costs.

There are certainly options available to help ease the financial burden of childcare costs and nursery costs, so it pays to be aware of them, and – perhaps more importantly – how you can access them.

There are also a number of other ways to save money that could be considered relevant to childcare costs, even if indirectly.

For example, the Money Saving Expert website offers deals on all sorts of things, from home appliances, to grocery shopping, to eating out.

Similarly, Indeed Flex offers Flexer Benefits, which include discounts on big brands, covering food shopping, fuel, tech, and more.

Understanding Tax-Free Childcare Benefits

Eligibility criteria

The eligibility criteria for childcare support and the number of hours of free childcare differ, depending on which scheme we’re talking about, so we’ll break it down in relation to those mentioned above.

Free childcare hours

For the 15 hours per week of free childcare for 3 and 4-year-olds, the following applies:

  • This childcare is available for 38 weeks of the year (during term time).
  • No minimum income threshold applies, and no set number of working hours apply.
  • The scheme is delivered through registered childcare providers, such as nurseries and playgroups.

For the 15 hours per week of free childcare for 2-year olds:

  • This childcare is available for 38 weeks of the year (during term time).
  • One parent must be working a minimum of 16 hours per week, with exceptions for single parents and/or those with disabilities.
  • The scheme is delivered through registered childcare providers, such as nurseries and playgroups.

For Tax-free childcare

To qualify for this particular childcare support scheme, and claim up to 20% of your childcare costs back per year, you’ll need to meet the following criteria:

  • You (or your partner) must be working (employed or self-employed) for at least 30 hours per week.
  • Your annual household income must be less than £150,000.
  • The childcare provider must be registered with Ofsted (the Office for Standards in Education, Children’s Services and Skills).

Universal Credit

There are few rules in relation to claiming Universal Credit for childcare costs, so it’s worth noting them down:

  • You (or your partner, if it’s a joint claim) must be claiming Universal Credit and be in work (employed or self-employed).
  • You must also be claiming the Universal Credit Child element for the child you need childcare for.
  • There’s no set number of hours you need to work to qualify for help with childcare costs, but the childcare that Universal Credit pays for must enable you to take on work, stay in work, or increase your hours.
  • As this childcare support is means tested, the amount you get will depend on your individual circumstances, so your earnings, childcare costs, and the childcare provider’s fees will all be taken into account.
  • You can usually claim back up to 85% of your eligible childcare costs.
  • You are responsible for finding and paying your registered childcare provider.
  • You’ll need to provide receipts or invoices for your childcare costs to Universal Credit when you make a claim.

If you’re not sure whether or not you qualify for any of these childcare support schemes, you can use a childcare calculator to estimate what support you might be entitled to: https://taxfreechildcarecalculator.com/

As you’ll see, some of these schemes require you to work a specific number of hours to qualify for the childcare support on offer.

At Indeed Flex, we know how hard it can be for working parents to balance working life with their childcare commitments, which you can read all about in our post on 9 – 3 jobs. This is why we offer complete flexibility in terms of our roles on offer; allowing you to work where you want, and – perhaps more importantly – when you want. This means you don’t have to scurry around, looking for someone to get your child (or children) to a childminder or nursery, and can also be there when it’s time to pick them up.

Why not see what’s available today, and how we can make work fit your schedule?

Application process

As with the set criteria for accessing the help available for meeting childcare costs and nursery costs, there are different processes in terms of how you apply for each type of support.

For the 15 hours per week of free childcare for 2, 3 and 4-year-olds, you need to:

1.Find a registered childcare provider, using the government’s childcare finder to locate Ofsted-registered nurseries, playgroups, or childminders in your area.

2. Check with the provider that they offer the 15 hours free childcare programme for 3 and 4-year-olds.

3. Enrol your child: Follow the provider’s enrolment process, which may involve filling out forms and providing your child’s birth certificate.

4. Apply here to confirm your free childcare.

For Tax-free childcare

The application process for Tax-Free Childcare is slightly more complex, involving a number of steps, including setting up a childcare account and managing it online. But, ultimately, it’s worthwhile, given the benefits.

Here’s how it works:

1. Check Eligibility: before you apply, you and your partner (if applicable) need to ensure you meet the eligibility criteria outlined earlier in this post, which you can do here.

2. Create a Government Gateway Account: If you don’t already have one, you’ll need to create  one – this is a login system used for government services. You can do this here.

3. Apply for a Tax-Free Childcare Account: Once you’ve set up a Gateway account, you then need to visit the Tax-Free Childcare website, and apply for a childcare account. You’ll need details about your children, income, and National Insurance number to complete this process.

4. Verify Your Identity: The government will need to verify your identity, which typically involves answering a series of questions about your financial history.

5. Choose Your Childcare Provider: Search for registered childcare providers within your chosen account. You can use the government’s childcare finder tool to locate them beforehand. Once you find suitable providers, make sure they’re registered with Ofsted (the Office for Standards in Education, Children’s Services and Skills).

6. Add Your Childcare Provider: Within your Tax-Free Childcare account, you can add your chosen childcare provider(s). The provider will then need to accept your invitation before you can start making payments through the account.

7. Pay into Your Account: You can pay in money to your childcare account using a debit card. Setting up a standing order or bank transfer is recommended for recurring payments.

8. Make Payments to Your Provider: Once funds are in your account, you can use them to pay your registered childcare provider electronically, through the government platform. The government will then automatically add 20% to your eligible childcare costs (up to £2,000 per child per year).

Important Points:

For Universal Credit

Universal Credit itself isn’t an application process specifically for childcare costs. However, there’s an element within Universal Credit called the Childcare Costs element that can help eligible working parents with childcare expenses. We’ve covered the eligibility criteria earlier in this post, so here’s how you apply:

1. Claim Universal Credit: Make a new claim or manage your existing claim through the government website or by calling the Universal Credit helpline.

2. Report your childcare needs: During the claim process, you’ll be asked about your childcare arrangements and costs. Make sure you give accurate information about your registered childcare provider and their fees.

3. Universal Credit assessment: Your work requirements, income, and childcare costs will be assessed to determine if you’re eligible for the Childcare Costs element.

And that’s it – those are the main application processes you need to know about when looking to get support for childcare costs and seeing how many hours of free childcare you’re eligible for.

Getting help with childcare costs: in conclusion

Getting childcare support is essential in helping parents to meet the rapidly rising costs of professional childcare.

There is government help available, but many argue that it’s not coming soon enough and that the application processes can be somewhat complex.

There’s also the difficulty involved in balancing working life with childcare commitments, which can be tricky – especially when some childcare support requires you to work a set number of hours to meet the minimum requirements.

At Indeed Flex, we recognise that it’s a delicate balancing act, so we look to provide flexible temp work solutions to those with busy schedules, or childcare arrangements that they need to work around.

With shifts lasting from just four and a half hours, or those available during the day, we can help you to fit work seamlessly around childcare, ensuring that you’re able to, for example, pick up your kids from nursery in the afternoon.

So, it is possible to get the childcare support that you need and find a working schedule that suits your busy lifestyle – allowing you to take care of your children.

Download the Indeed Flex app today, create an account in minutes, and start finding jobs that suit your lifestyle and childcare commitments.


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