Getting Help With Childcare
One of the biggest concerns to working parents is childcare. It can cost so much that it can eat a huge chunk out of a wage packet. That’s especially true with young children, where the care needed is full time, bur even when they’re in school, childcare services like afterschool clubs aren’t free. Children need care, and it costs – what’s the answer?
Thankfully, there are avenues that can help financially with the soaring coat of childcare. You might be lucky enough to work for an employer that has crèche facilities, although those are becoming fewer and fewer in this country these days. But even if you’re not, there is money available to help you with childcare services.
Child Tax Credit, Working Tax Credit & ChildcareBoth the child tax credit and the working tax credit can help relieve the financial burden of childcare services costs. The child tax credit is available to parents of children in full-time education, and the amount received is based on the household income. One of the beauties of this programme is that you don’t need to be working to claim the child tax credit.
Working tax credit tops up the wages of those who are working and receiving low incomes. How much you receive depends upon a number of different factors. Very handily for working parents, there’s a childcare cost component to the programme, as long as the parents are over the age of 16, and both work more than 16 hours a week (if one works the other must be in hospital, in prison, or have a disability).
It kicks in from the time the baby’s born, as long as you were working at least 16 hours a week beforehand, so it covers the period of maternity leave.
As to the childcare, the working tax credit will pay towards your actual costs for childcare, as long as it’s with a registered and approved child minder or childcare agency. You should be aware, however, that it doesn’t apply to any full-time education, or to payments or refunds you receive from your local education authority for any part-time nursery education.
Also, there are limits on the amount you can claim, with a maximum of £175 a week for one child or £300 for two children, and it will 80% of your actual childcare costs.
There’s no doubt that this is a great programme, allowing parents – especially mothers – to return to work and not end up spending most of their earnings on care for their children. It’s especially useful because it also covers at least some of the costs of afterschool clubs, allowing you to work full-time, rather than just part-time, when your children are of school age.
What Are Childcare Vouchers?Childcare vouchers are essentially coupons provided by employers to help defray the costs of childcare services for their employees. Sometimes they’ll be a job benefit, sometimes they’ll demand what’s called a “salary sacrifice,” meaning a slightly lower salary in exchange for the vouchers.
Although they might seem like a great idea, you should take a couple of things into consideration before accepting them. If you use the vouchers, you can’t claim the amount they cover under the childcare portion of the working tax credit. In fact, they can end up affecting your entitlement to that. So it’s worthwhile sitting down and doing a few sums first!
Care for children while you work isn’t easy financially, but the options available do help with childcare services.