The childcare scheme operates on an algorithm that matches the right candidate with the system according to eligibility criteria set by the government. The eligibility criteria has been set to help join the perfect candidates with the government scheme. It assists in providing a transparent and helpful system for working parents. The key points that are important for eligibility are:

To be eligible none of parent`s income should exceed £100,000 annually

  • Employment – Typically both the parents need to be working, although self-employed and those who are soon starting to work are exempted. Both partners must earn at least £152 per week, but not more than 100,000 per year. If any of the parents earns more than 100,000 per annum then they would not be considered eligible for the scheme
  • Working Hours – There is also a minimum number of hours that the parents need to be working per week. The minimum working hours may vary as the threshold of £152 per week makes it approximately equivalent to 16 working hours per week.
  • Age Of The Children – The children must be aged below 12, or below 17 (for children with disability).
    • Continuation Until September: Eligibility continues until the 1st of September following the child’s 11th birthday (or 17th birthday for disabled children).
  • Citizenship – The parents must have an insurance number and they may be British or Irish citizens. Those who have their status tagged as settled in the UK can also enjoy the perks and benefits of this scheme.
  • Other Nationalities: You may also be eligible if you have one of the following:
    • Settled or pre-settled status under the EU Settlement Scheme.
    • Permission to live and work in the UK, such as a visa or indefinite leave to remain.
  • Tax-Free Childcare for Different Situations
    • Between Jobs – You may still qualify if you expect to start a new job within 31 days.
    • Made Redundant – A grace period may apply, allowing temporary eligibility after job loss.
  • Military Families – Armed forces personnel are eligible to apply for the same scheme under the same criteria.

Quarterly Reconfirmation

  • Entitlement Period – Eligibility is assessed every three months.
  • Reconfirmation – You must remember to reconfirm your details quarterly to continue receiving support uninterrupted.
  • Eligibility Code – Upon approval, you’ll receive a code to provide to your childcare provider.

What if I am self employed?

Self-employed individuals can also get facilitated with the Government’s childcare facilitation services. The criteria to apply for the scheme for these parents are almost the same as for those employed parents.

Here are some of the points regarding self-employed parents and Tax-free childcare facilitation are:

For the self-employed parents, the amount of income for each parent or single parent is £2,167 every three months, if the parent is aged 23 or older

Self-Employed Eligibility

  • Eligibility: Self-employed individuals are eligible for the Tax-Free Childcare scheme. The criteria are similar to those for employed parents.

Income Requirements

  • Minimum Income Threshold: To qualify, each parent (or a single parent) is expected to earn at least the equivalent of 16 hours per week at the National Minimum Wage or Living Wage over three months (individually not combined).
  • Parents Income Based on Age:
    • Aged 23 or Older: Must earn at least £2,167 every three months (based on the National Living Wage of £10.42 per hour as of April 2023).
    • Aged 21 to 22: Must earn at least £2,117 every three months (based on £10.18 per hour).
    • Aged 18 to 20: Must earn at least £1,557 every three months (based on £7.49 per hour).
    • Under 18: Must earn at least £1,098 every three months (based on £5.28 per hour).

Income Calculation

  • Averaging Income: Self-employed parents can average their income over the year to meet the minimum income requirement.
  • Newly Self-Employed: If you’ve started your business within the last 12 months, you are still eligible even if you do not meet the minimum income threshold.

You can check out Tax-free Childcare Calculator for a detailed overview of the savings and costs involved in using this government’s childcare support.