There is so much information regarding funding that it can be a minefield. Here we try to explain what the various types of funding are, how to use them and what benefits they can be combined with. We must point out that there are a lot of changes being made with regards to the funding schemes and we will try to address those currently in place as at March 2025. We endeavour to update the page as required but please do refer to the Government help pages at childcarechoices.co.uk for the most upto date information.
TYPES OF FUNDING
You may have heard about all different types of funding talked about in the media. Working Families Funding, Disadvantaged Funding, 9mth, 2yr, 3/4 yr and then there's the Tax Free Childcare to add to the confusion. And what if you are already in receipt of certain benefits such as Tax Credits or Universal Credits. It's no wonder families are confused. Here we will aim to set it out in simpler terms and cut through the jargon.
Things worth noting, no matter where you opt to take your funded hours:
- You don't need to take the full 15 or 30 hours. It may be for example that you are eligible for 30 hours but 21 hours works for you, your family and your provider.
- It is not possible to use more than your 15 (or 30) hours in a week or more than 10 hours in a day (Additional hours will be subject to fees as agreed with your provider).
- Just because you are eligible to claim the hours doesn't mean that childcare settings are able to offer them, in full or even at all.
- Each childcare provider will have their own Funding Policies which outline how (if) they offer the funding (eg, only certain days or within certain hours).
- The funding is intended to pay for high quality, flexible childcare, able to be accessed free of charge to parents. It does not cover: Meals, Nappies, Additional hours, Additional activities such as trips.
- Cost of additional items should not be made mandatory by your provider or made a condition of accessing a place. You can speak to your provider about what alternatives they may have (eg, provide own meals or nappies).
Part 1 - What to do first?
Step 1
You can be checking your eligibility and applying for funding even before you have found a childcare provider. You can do this by visiting the Government's website, Childcare Choices. Follow the steps on the website and if eligible, you will be provided with an 11 digit code for 'working families funding' or a letter for alternative '2 year funding'. You need to give this code (or letter) to your childcare provider to access the funded hours.
Step 2
Find a childcare provider who offers funding and has an availability. Most providers offer funding but they don't have to, so it's worth noting there will be some who don't. To find available or suitable providers it is a good idea to check your local authority website. If you are in our area, the Lancashire County offer this helpful page. Alternatively many providers advertise on Childcare.co.uk. This is a national website and is free to join, search, read & reply to messages. (Optional paid services available).
** It doesn't matter too much which of these steps you do first BUT to be able to use your funding, you must obtain your code (or letter) prior to the deadlines which we will discuss next.
Part 2 - When to apply / Understanding the dates, terms & deadlines.
First we will look at the 'terms' (dates) in which you can begin to take your funded hours. 'Terms' are referred to regularly in the funding jargon and these refer to the 3 separate sections they split the year into. These are the same terms that schools use, so if you have school age children, you may be more aware of these. This table shows the terms, their names and dates:-
It's also important to note that whilst the terms cover the dates shown, not the entire term is funded. Funding is provided for 38 weeks per year (same number of weeks that schools open). This next table shows how many funded weeks are available within each of those terms.
You may have the option to 'stretch' your funded hours. This is something that in our setting we like to do as standard but is very much down to your setting and whether they are prepared to offer this. Essentially this means that you get less than your 15 (or 30) funded hours per week but for more than the 38 term time weeks. This possibly benefits those who pay for additional hours rather than those on 'funding only' by giving a regular payment amount due each week or month regardless of how many term weeks there are. This is also particularly helpful if you claim Tax/Universal Credits as your childcare costs won't considerably fluctuate throughout the year.
Next you're maybe wondering "When can I use the entitlements from?" This is usually something to think about the first time you try to access a funded place. It doesn't matter which age/stage of funding you are looking at, the dates of entitlement are all the same. Once your child is placed with a Childcare Provider you will not need to concern yourself with when they will fall into the next age/stage category as they will automatically rise up through them when appropriate. The only difference is if you go from 15 hours funding to a stage where you are now entitled to 30 hours funding.
DEADLINES
You would be forgiven for thinking that you have now acknowledged every step and so you should be okay to book a childcare place and apply for your funding. However, there are deadlines that must also be adhered to with regards to the code issue date! The code issued to you by the government (if eligible for funding), needs to have been issued by (at the latest) the day before the term begins as per the dates in the following table. (Scenario: You think you are eligible for funding having checked all the information yourself, you have your childcare place booked and you promise the Childcare Provider that you will apply for the code and send it to them. You are busy with life (like we all are) and you will sort that nearer the time. A couple of days before childcare is due to start, you apply and receive your code. You believe all will be good. However, your child is starting the first full week in April (which is around the 6th) and your code was issued on 2nd April. All good right? NO. The code had to have been issued by 31st March. You now won't be able to claim the funded hours until next term which begins 1st September)
The only difference to these code deadlines is for those returning to work from Maternity, Paternity or Adoption leave. The following table shows the dates you can apply and when you can access your funded place.
Some final points to note
- If your child is unwell, you are not able to claim back any funded hours that your child has been unable to attend due to illness. The funded hours will be used to keep your child's place open for their return.
- If your child is unable to attend due to a family holiday, their funded hours will normally be used to keep their funded place open until they return.
- You need to log into your childcare account every 3 months to reconfirm that your details are up to date and that you remain eligible. Email reminders will be sent.
- You will need to complete & sign a Parental Agreement with the Local Authority. This will be supplied through your Childcare Provider who may help you with completion.
- If you also access additional hours (paid for), you will be asked to complete and sign a separate contract with your Childcare Provider.
- There are some other situations in which you may be entitled to funding, such as Students who also work, Foster Carers, those who have a disability and claim PIP's. In these cases you should give the Funding Team a call to discuss.
- You can't use funded hours with a Nanny or Home Carer, nor can you use for childcare provided by a relative such as a Grandparent (even if they are a registered childminder!).
What is it?
Tax Free Childcare is a totally different thing to the various funding schemes and can be used concurrently with your funding. Picture this scheme as a bank account held with the government. For every £8 you put into the account, the government will top it up by another £2.
How it works
- Set up an online childcare account for your child on GOV.UK.
- Most childcare providers are already signed-up to offer this and you will link them to your account following the on-screen steps. If they are not already signed up, there is the option for the system to then send them an invitation to sign up. (We are already signed up and have been for a number of years).
- You start to deposit money into the account. For every £8 you pay into the account, the government will pay in £2. You can get up to £500 every 3 months (£2,000 a year) for each of your children to help with the costs of childcare. This goes up £1000 every 3 months if a child is disabled (up to £4,000 a year).
- The 'top-up' occurs in your account. You then use the topped-up money to pay your childcare provider through your online account.
- As with all the various fundings above, you must reconfirm your eligibility for tax-free childcare every 3 months. You will get a reminder and it is simple and quick to do.
Eligibility for the Tax-Free Childcare scheme:
- You must be in work or self-employed and/or be on parental leave, sick leave or annual leave.
- Your child or children must be 11 years old (or younger).
- Your child or children must live with you for the majority of the time.
- You must be earning at least the National Minimum Wage for a minimum of 16 hours per week.
For all eligibility checks, further guidance or to apply now, please refer to the government website Childcare Choices.
Credits:
Created with an image by AdriFerrer - "Colorful cartoon children figurines holding hands on black"