Thousands of parents missing out on £2,000 annual tax-free childcare, Martin Lewis warns

Thousands of parents could be missing out on a £2,000 cash boost to help cover their childcare costs each year, founder Martin Lewis has warned.

By Claire Schofield
Friday, 25th October 2019, 1:49 pm
Updated Friday, 25th October 2019, 1:50 pm

The tax-free childcare scheme was launched in 2017 and is a government subsidy that can give families a 20 per cent boost at nurseries and childminders across England.

“Thousands missing out”

The government initiative is designed to give parents with children aged 12 or under (or up to age 17 if they have disabilities) support with childcare costs.

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Parents can receive up to £2,000 per child, per year with the scheme

Parents can open an online account to pay for registered childcare, such as childminders, nurseries and nannies, after school clubs and play schemes, and home care agencies - and the government will top up the money you pay into the account.

For every £8 paid in, the government will add an extra £2.

Parents can receive up to £2,000 per child, per year - amounting to £500 every three months.

Parents with a disabled child can receive up to £4,000 per child - amounting to £1,000 every three months.

Tax-free childcare was introduced to replace the Childcare Vouchers salary sacrifice scheme

Around 3.1 million families are eligible for the scheme, but according to Lewis, thousands of parents are missing out.

Speaking on ITV’s Good Morning Britain, he said: “It’s half-term for many people, let’s talk tax-free childcare.

“This is the Government’s system for helping people who pay childcare to get some support on it. Frankly there's been lots of logistical problems with it.

"I understand why people aren't claiming it, but hundreds of thousands of people are missing out.

“You can get up to £2,000 per child, per year, free towards childcare."

Who is eligible to claim it?

Tax-free childcare was introduced to replace the Childcare Vouchers salary sacrifice scheme, which is no longer available to new parents.

To be eligible for it, you and any partner, must each expect to earn (on average) at least £131 per week, which is equal to 16 hours at the National Minimum or Living Wage.

You may also still be eligible if you, or your partner, are on maternity, paternity or adoption leave, or you are unable to work because you are disabled or have caring responsibilities.

You cannot get tax-free childcare if either you, or your partner, each individually expect to earn £100,000 or more.

To apply for tax-free childcare, visit the Childcare Choices website and complete the online application.