A government scheme offers families up to £500 every three months to help cover childcare costs. Yet many eligible parents have not applied, despite a straightforward 20-minute online process.
With summer holidays in full swing and childcare costs mounting, UK parents are being reminded to take advantage of the tax-free childcare scheme. According to GOV.UK, the initiative allows working families to receive a government top-up of up to £2,000 a year per child—or £4,000 for children with disabilities.
Launched to ease the financial pressure of rising childcare expenses, the tax-free childcare programme operates via an online account where for every £8 paid in by parents, the government contributes £2.
These funds can only be used to pay for registered childcare providers. Despite the clear benefit, uptake has lagged, prompting renewed calls for families to check their eligibility and apply.
How the Scheme Works and Who Is Eligible
The tax-free childcare account is available to working parents or guardians of children aged 11 or under—extended to 16 for children with disabilities.
According to GOV.UK, families can receive up to £500 every three months per child to help pay for nurseries, childminders, after-school clubs or holiday schemes. For eligible children with disabilities, the quarterly maximum doubles to £1,000.
To qualify, both parents must generally be in work and earning at least the equivalent of the national minimum wage for 16 hours per week.
Those who are self-employed are also eligible, with relaxed income requirements if they have been trading for less than 12 months. There is an upper limit: applicants with an adjusted net income over £100,000 are excluded, even if only one partner exceeds the threshold.
Some flexibility exists for those temporarily out of work. Parents on maternity or paternity leave, sick leave, or in a household where one partner is in receipt of certain disability or carer benefits may still qualify.
Additional Benefits and Scheme Limitations
The scheme can be used alongside the government’s 15 or 30 hours free childcare offer for three- and four-year-olds, as well as certain two-year-olds. This dual benefit is particularly relevant as many working families combine these hours with top-up payments to cover full-time care.
Applications are made through the official GOV.UK portal and take around 20 minutes to complete. The funds are managed through a secure online account and can only be used with registered childcare providers.
