Croeso / Welcome to

Help with Childcare CostsWorkshop

Wrexham April 7th 2011

David Dallimore: Melyn Consulting

Aims of the day• By the end of the workshop, you should:

– Understand the range of help with childcare costs available to parents

– Be familiar with the Help With Childcare Costs publications

– Examine changes to the tax and benefits system

– Be able to support parents looking to move into work and training

– Be better able to work together and monitor outcomes

– Be able to cascade the information to other colleagues

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Help with Childcare Costs

• general help

• for employed parents

• for parents moving into work

• for parents in education

• for the parents of disabled children

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General help for parents

• Child Benefit

• Child Tax Credit

• Foundation Phase

• Flying Start

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Child Benefit

Eligibility

• Responsible for a child under 16 (or 18)

• Eligible to live in UK

Amount

• £20.30 for eldest, £13.40 for others

• Rates frozen for 3 years

By 2013, child benefit will be withdrawn from households with a higher rate taxpayer

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Child Tax CreditEligibility

• Responsible for a child under 16 (or to 20) and parent is 16+

• Eligible to live in UK

• Means tested on income generally less than £40k

Amount

• Family element £545

• Child element £2,555 per child

• Disabled child element £2,800

• Severely disabled child element £1,130

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Foundation PhaseEligibility

• Term after third birthday

Amount

• Minimum of 10 hours free Foundation Phase early education

• 37 weeks per year

• With approved providers

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Flying StartEligibility

• Live in a Flying Start designated area (school catchment areas)

Amount

• Minimum of 10 hours free Foundation Phase early education

• 37 weeks per year (42 in Wrexham?)

• With approved providers

• Starting term after 2nd birthday

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Help with childcare costs for employed parents

• Childcare element of Working Tax Credit

• Employer-supported childcare

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Childcare Element of the Working Tax Credit

Eligibility

• One lone parent or both parents in paid work of 24 and 16 hours+

• Have caring responsibilities for a child up to Sept after 15th birthday

• Use registered childcare

• Live in UK

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Childcare Element of the Working Tax Credit

Amount

• Up to 70% of eligible childcare costs

• Up to maximum of £175 for one and £300 for two+ children

• Paid for average weekly childcare costs

• HMRC must be told of changes to circumstances ie. childcare costs change by more than £10, childcare not registered, change in provider, receive employer supported childcare, changes to household income, or working hours.

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Employer Supported ChildcareSalary Sacrifice

• Employees give up wages in return for childcare vouchers which are then exempt from tax and NIC’s up to £55 for basic rate tax payers

• Low income families generally better off with WTC

Salary Plus

• Childcare vouchers are given to employees on top of salary

• Exempt from tax and NIC’s

Workplace Childcare / Employer Contracted Care

• Childcare is provided by the employer directly or indirectly

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Help with costs for parents moving into work• New Deal

– for Lone Parents

– for Partners

– Flexible New Deal

– for Disabled People

– Work Focused Support for Carers

• Genesis 2

• Job Grant

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New DealEligibility

• Meet the criteria of the relevant New Deal Programme:

– Lone Parents: aged 16 + not in work or working <16 hours

– Partners: aged 16 + who work less than 16 hrs per week and whose partner is claiming WTC (or pension credit)

– Flexible New Deal: People who have been on JSA for over 12 months (or 6 months in some cases). COMPULSORY

– Disabled People: in receipt of disability benefits

– WFSC: aged 18+ who care for a disabled child who work <16 hours and can’t access other New Deals.

• Use registered childcare

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New Deal

Amount– Childcare Assist - can cover childcare costs for the first week of

work. It can be up to £175 for 1 child and up to £300 for 2 or more children.

– Adviser Discretion Fund - Adviser Discretion Fund can offer up to £300 to New Deal participants to help with the costs of finding or starting work which could include up-front childcare costs. No set criteria for how the money can be spent.

– Childcare Subsidy - if an ND participant gets a job offer of less than 16 hours per week, and receives a qualifying benefit (eg. JSA or IS),they may be able to access support through the Childcare Subsidy. The subsidy provides up to £87.50 per week for 1 child and up to £150 per week for 2 or more children. If the criteria are met the subsidy can be for up to 52 weeks.

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New Deal

Amount– Replacement Care – for parents on New Deal with specialist

childcare costs for a child with a disability or long-term illness, if childcare costs exceed the current Jobcentre Plus support limits of £175 per week for 1 child or £300 for 2 or more children.

– In-work credit - for lone parents starting a job of 16 hours+ which is expected to last at least 5 weeks, have been claiming IS or JSA for at least 52 weeks and are bringing up a child alone. £40 per week is paid on top of earnings for up to 52 weeks. This must be claimed within 5 weeks of starting work.

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Genesis 2

Eligibility• Unemployed parents aged 16+ and living in Wales

Amount• Free help, support and guidance

• Free or subsidised childcare

• Free daytime ‘taster’ courses for those wanting to work with children with free creche

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Parents in education

• Assembly Learning Grant FE

• HE Childcare Grant

• Parents’ Learning Allowance (HE)

• NHS Childcare Allowance

• Hardship Loans / Financial Contingency Fund

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Assembly Learning Grant FE

Eligibility• Persons aged 19 years old or over in post compulsory

education who are ordinarily resident in Wales on the first day , of the first academic year of their course and  taking eligible further education courses.

Amount• Up to £1,500 is means tested and paid each academic

year to help meet the costs of studying.

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HE Childcare Grant

Eligibility• Full-time students in HE with dependent children in

registered and approved childcare.

• Student or partner must not receive the childcare element of the Working Tax Credit.

• Can be applied for before or during your course. Childcare Grant is paid during term times and holidays. Grant is disregarded for benefits inc. housing.

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HE Childcare Grant

Amount• 85% of the actual childcare cost subject to

a maximum grant of £161.50 a week for 1 child and £274.55 a week for more.

• The SLC will usually pay it in three instalments, one at the start of each term, with loan and other grants.

• LA will ask for confirmation of actual childcare costs every term. 

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Parents’ Learning Allowance

Eligibility• Full-time students in HE with dependent children to help

with course-related costs

• Disregarded for benefits

Amount• Up to £1,508 a year available. Means tested.

• The SLC will usually pay it in three instalments with your loan. This is a non repayable grant.

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NHS Childcare Allowance

Eligibility• NHS Bursary funded students except those only entitled

to a fees only award.

• Use registered childcare

Amount• Up to 85 per cent of the costs to a maximum of £126.65

per week for 1 or up to £ 187.75 for 2 or more children. Means tested

• Available for the full 52 weeks of the academic year and will usually be paid in monthly instalments.

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Financial Contingency Funds

Eligibility• Part-time or full-time students in higher or further

education who are experiencing financial hardship and, without help, might leave their course

• Administered by the institution

Amount• May be made as a loan

• Other conditions might apply

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Parents with a disabled child

• Disability Living Allowance

• Disabled child element of Child Tax Credit

• Direct Payments

• Assisted childcare schemes

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Disability Living Allowance

Eligibility• Child may qualify for DLA if they have a physical and/or special

educational need and require more help or supervision than other children of the same age.

• Two components: Care and Mobility. The care component is usually available from aged three months and for the mobility component when they are aged three years

Amount• The care component is paid at 1 of 3 levels, which range from £18.95

per week to £71.40 per week depending on the level of care the child needs.

• Applications are complicated.

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Disabled Child Element of Child Tax CreditEligibility• Generally, if child receives DLA

Amount• The disabled child element (£2,715 per year) - for each child in the

family claiming Disability Living Allowance or who is registered blind;

• The severely disabled child element (£1,095 per year) - for each child in the family claiming the highest rate care component of Disability Living Allowance.

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Direct Payments

Eligibility• Parental responsibility for a disabled child

• Assessment of need by Social Services

Amount• Variable depending on need

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Assisted Childcare Schemes

Cymorth• Assisted places for 0 to 3’s. Referrals only.

WPPA / MYM• One sessions per week funded for parents in receipt of IS, JSA or IB.

CPCKC• Assisted places for 3 to 14 yrs (with specific situations)

• Helping hands: 1:1 support in out of school care

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April 2011 Tax & Benefit Changes

Tax Credits• At present, tax credits are withdrawn by 39p for every pound that

their income exceeds that threshold. Thresholds are £6,420 a year for those receiving both working tax credit and child tax credit and £16,190 for those receiving only child tax credit.

• From April 2011, the taper will increase to 41p in the pound. Therefore, the family element, currently guaranteed at £545 if annual income is £50,000 or less, will start to reduce by 41p for every £1 when income reaches £40,000.

• Child element of child tax credit - will be increased by £150 above indexation from April 2011. It will then rise by a further £60 from April 2012.

• RPI (5.5%) and CPI (4.4%)

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April 2011 Tax & Benefit Changes

Child Benefit• Rates frozen for 3 years

• To be withdrawn from higher rate tax-paying households from 2013

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April 2011 Tax & Benefit Changes

Childcare• Maximum childcare costs reduced from 80% to 70%

• Those who receive childcare vouchers or those who turned down childcare vouchers to claim the childcare element of working tax credit will need to revisit their decision

• Working Tax Credit eligibility - couples will have to work at least 24 hours a week, with one partner working at least 16 hours (from 2012)

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April 2011 Tax & Benefit Changes

Childcare Example

For example, a family with two adults and two children, working more

than 30 hours, earning the average wage of £25,000 a year, with

childcare costs of £150 per week.

£8,738.80 in 2010-11

£8,157.20 in 2011-12 taking account of the rise in each child element

by £180, the increase in reduction taper to 41%, the reduction in

childcare costs from 80% to 70%, the freeze on basic working tax

credit and 30-hour elements and an estimated Consumer Price

Index of 3.1%

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WAG Policy Statement on Childcare

Affordable Childcare

• Increase awareness of financial support (DWP, JCP & FIS)

• Childcare for older children to be eligible for WTC

• Survey of affordability

• Develop Social Enterprise childcare

• Improve childcare businesses

• Offer Flying Start and Foundation Phase more flexibly to meet parents’ childcare needs

Resources

HM Revenue & Customs

www.hmrc.gov.uk

Daycare Trust

www.daycaretrust.org.uk

Jobcentre Plus

www.jobcentreplus.gov.uk

Leaflets & Factsheets

Childcare helpline

Advice and Guidance

Website Website with hyperlink

New Deal

Helpline Publications Funding