Coronavirus: childcare support and benefits for children
The coronavirus (COVID-19) outbreak is having far-reaching financial impacts on individuals and businesses across the UK, and indeed across the world.
You may be wondering what impact some of the changes will have on childcare support and benefits for children.
1. My hours of work have reduced, can I still claim help with my childcare costs?
- Tax credits
If you claim help towards your approved childcare costs through tax credits, you have to normally work a certain number of hours a week. If your normal hours change and you fall below the required number of hours, you will need to report this to HMRC and will stop being entitled to the childcare element (although there may be a four week run-on of payments). HMRC have relaxed the usual rules during the coronavirus crisis. We have published a table that explains how different work changes currently affect working tax credit (including the childcare element) in our employee section.
- Universal credit
If you claim help towards your approved childcare costs through universal credit (UC), the general rule is that you can claim for the childcare costs (up to a maximum limit) where the childcare is needed so that you can take-up or continue in paid work. There is some information about how help with childcare in UC works in our childcare section.
We are currently waiting for guidance from DWP about what happens if your work is affected due to the coronavirus outbreak.
- Tax-free childcare scheme
If you claim help towards your childcare costs through the tax-free childcare scheme (TFC), you will usually have an on-line childcare account and the money you pay in to that account attracts a Government top-up towards your approved childcare fees. There is some information about how TFC works in our childcare section.
If you are wondering whether you can withdraw funds in your childcare account to pay for things other than approved childcare, you may like to read our separate piece, Accessing money in childcare schemes.
TFC is usually based on a three-month entitlement period and you will have been asked to confirm that your income was expected to be above a certain level for your entitlement period. That means, if you are in the middle of an entitlement period, there will be no impact on your TFC if your hours fall or your work stops.
However, if you need to reconfirm your eligibility you will have to confirm that you expect your earnings to be above the threshold over the next three months. We are awaiting guidance on what people should do in this scenario from HMRC. I have been laid off temporarily (furloughed) due to the coronavirus outbreak, can I still claim help with my childcare
2. I have been laid off furloughed due to the coronarvirus outbreak, can I still claim help with my childcare?
HMRC have relaxed the usual rules during the coronavirus crisis. We have published a table that explains how different work changes currently affect working tax credit (including the childcare element) in our employee section.
3. I am ill/self-isolating and cannot take my child to childcare can I still claim for the childcare fees that I have to pay during this period?
As a general rule, periods of sick leave do not normally affect entitlement to Government help with childcare. During the current coronavirus outbreak, Government guidance outlines that periods of isolation in line with official guidance are also to be regarded as periods of sick leave.
For tax credits, providing you were working for the required number of hours before your period of sickness, you will be treated as still being in remunerative work for up to 28 weeks whilst you receive any of ESA, SSP or National Insurance Credits because you have limited capability for work – or you would receive them but for the fact you are self-employed.
Usually, the childcare rules in tax credit require your child to attend the childcare – however we expect that HMRC will relax this rule and we will update the website as soon as we receive confirmation. In the meantime, you should contact the tax credit helpline to clarify.
If you are receiving UC, you should check with DWP.
4. My childcare provider has temporarily closed but under my contract I still have to pay my childcare provider even though my child isn’t attending. Can I claim help with these costs?
Qualifying childcare costs can also include fees that have to be paid to retain the child’s place, sometimes called ‘retainer fees’ but you should check with HMRC (for tax credits and TFC) and with DWP (for UC) to confirm whether these fees are allowed.
If the fees are not retainer fees, our understanding of the rules is that usually children need to actually attend the childcare in order to continue claiming help with fees - however we expect that HMRC will relax this rule to deal with situations like this and we will update the website as soon as we receive confirmation. In the meantime, you should contact the tax credit helpline to clarify.
5. My childcare costs have stopped, what shall I do?
For tax credits, if your childcare costs have stopped, you will need to work out when the change took place and notify HMRC about the change to your costs. There is some information about calculating changes to childcare costs for tax credits on our website for advisers, Revenuebenefits.
For UC, if your childcare costs have stopped, you simply don’t need to report childcare in your UC on-line journal.
For TFC, if your childcare costs have stopped, you may like to read our separate piece about Accessing money in childcare schemes.
Qualifying young person and full-time education
1. The college has closed, is my son/daughter still classed as being in full-time non-advanced education?
We are currently waiting for guidance from HMRC and from DWP about whether and how the closure of schools and colleges will affect the rules around entitlement to Government support for qualifying young people.
Free school meals
1. My child isn’t in school, can they still get free school meals?
While schools and colleges are closed due to the coronavirus outbreak, local authorities and schools/colleges will be making arrangements to provide equivalent free school meals provision for those entitled to free school meals on financial grounds. The provision will vary across the UK but should meet the equivalent value.
For families who already qualify for free school meals on the grounds they meet the conditions of receiving UC and have earnings below the threshold or child tax credit (CTC) and have earnings below the threshold, we understand the local authority and educational establishment will identify them and make local arrangements.
Families who start to meet entitlement conditions for free school meals due to a reduction in income and/or new entitlement to UC, may need to apply for free school meals.