When 30 hours' free childcare starts as Budget announces expansion of scheme
Free childcare is set to be extended under major plans in Jeremy Hunt's Spring Budget. It's part of the Chancellor's efforts to encourage more people to return to work and boost the economy.
At present, working parents living in England can get 30 hours of free childcare for children aged three to four. There are different schemes in Scotland, Wales and Northern Ireland.
The scheme is set to be extended to include children aged one and two. In addition, families on Universal Credit will get childcare costs paid upfront rather than having to claim them back, and the £646 monthly limit on childcare claims will rise by several hundred pounds.
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At present, all parents in England are entitled to 15 hours of free childcare per week for 38 weeks of the year - during school term time - for three to four-year-olds.
Working parents can get double this level of support, with 30 hours of free childcare for children aged three to four if the parents each earn at least 16 hours a week on the minimum wage. This means £1,000 if they are under 18 or an apprentice, £1,420 if aged 18 to 20, £1,909 if aged 21 or 22, and £1,976 if aged 23 or over.
In addition, free childcare is available to two-year-olds in England if parents are on Universal Credit (with wages of £15,400 a year or less after tax), or on Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance (ESA), Pension Credit, Child Tax Credit or Working Tax Credit. Two-year-olds can also get free childcare if they receive disability living allowance, are in the care of a local authority, or in some other circumstances.
What is expected to change in the Spring Budget?
Chancellor Jeremy Hunt announced that the free childcare scheme for working parents is to be extended to include children aged one and two. Mr Hunt at first thought this would prove too costly to deliver but has revived the idea because it will boost growth by helping people return to work.
Around 9 million people are economically inactive and the Government is keen to tackle the issue and remove barriers to employment. The measures form part of the new Spring Budget and from April 2024, working parents of two-year-old children will be able to get 15 hours of free childcare per week, while parents with children aged between nine months and two years will be able to do so from September 2024.
At present, for children turning three between September 1 and December 31, free childcare applies for the term starting on or after January 1 and parents are urged to apply between October 15 and November 30. For children turning three between January 1 and March 31, parents can get free childcare for the term starting on or after April 1 and are recommended to apply between January 15 and February 28.
And for children turning three between April 1 and August 31, free childcare is available for the term starting on or after September 1 and parents should apply between June 15 and July 31.
Childcare costs in Britain are among the highest in the world. Figures show the UK is the third most expensive country for childcare among the 38 countries in the OECD (Organisation for Economic Co-operation and Development), behind Switzerland and New Zealand.