Who can claim the childcare element of working tax credit?
Childcare support in tax credits is paid through the childcare element of working tax credit. To qualify for this you need to:
- Meet the main conditions for claiming tax credits
- Meet the conditions for claiming the basic element of working tax credit
- Meet the conditions for the childcare element of working tax credit
This part of the website explains the conditions for the childcare element of working tax credit. You can click on the links above to find out more about qualifying for tax credits and the basic element of working tax credit.
Can I claim childcare costs for my child?
You can claim the childcare element towards childcare costs for a child you are responsible for and who normally lives with you. If the child normally lives both with you and with another person (for example their other parent from whom you are separated or divorced), you must have main responsibility for them. You can find out more about responsibility for a child in our child tax credit section.
The definition of a child for the childcare element is different to that for child tax credit. As such, childcare is only payable for children until:
- 1 September following the child’s 15th birthday
- 1 September following the child’s 16th birthday if the child is disabled for child tax credit purposes
You can only claim for costs that are counted as qualifying childcare. The maximum you can claim 70% of eligible childcare costs up to a limit of £122.50 for one child (70% the maximum £175) and £210 for two or more children (70% of the maximum £300). See ‘How do I claim’ to find out how to calculate your childcare costs.
The 2 child limit, introduced in child tax credit from 6 April 2017, which limits the child element to no more than two children unless certain exceptions apply, does not affect the childcare element.
Who qualifies for the childcare element of working tax credit?
To qualify for the childcare element you need to be working a certain number of hours.
If you are a lone parent you must work at least 16 hours a week.
If you are part of a couple, you both must work at least 16 hours a week unless one of you is ‘incapacitated’, in prison, in hospital or entitled to carer’s allowance (see below).
In addition to this, you also need to meet the hours requirements for the basic element of working tax credit.
What does ‘incapacitated’ mean for childcare purposes?
You or your partner will be treated as incapacitated for childcare purposes if you receive one of the following benefits:
- housing benefit (HB) with a disability premium, or a higher pensioner premium;
- housing benefit with a childcare earnings disregard because the other member is ‘incapacitated’ under the HB regulations
- disability living allowance (DLA);
- personal independence payment (PIP)
- armed forces independence payment (AFIP)
- attendance allowance (AA);
- severe disablement allowance;
- increase of disablement pension under Section 104 Contributions and Benefits Act 1992;
- incapacity benefit at the short-term higher rate or the long-term rate;
- industrial injuries benefit with constant attendance allowance;
- war disablement pension with constant attendance allowance or mobility supplement;
- a vehicle under the Invalid Vehicle Scheme.
- contributory employment and support allowance (CBESA) or a limited capability for work credit (from 1 May 2012) where entitlement to that allowance, that credit, statutory sick pay (SSP) or short term higher rate incapacity benefit, long term incapacity benefit or severe disablement allowance has existed for a period of 28 weeks comprising one continuous period or two linked periods (provided that, if the person received statutory sick pay, they also met the relevant contribution conditions);
Under the last bullet point, linked periods can include any periods of:
- CBESA providing they were no more than 12 weeks apart
- SSP as long as they were no more than 8 weeks apart
- CBESA after receiving SSP as long as they were no more than 12 weeks apart
- CBESA after receiving short term higher rate or long term incapacity benefit or severe disablement allowance as long as they were no more than 12 weeks apart.
If the claimant is in hospital, but would be getting severe disablement allowance, DLA, PIP, AFIP, AA or an increase of disablement pension if they were not, they will still qualify.
From April 2018, any benefit, allowance or credit of another EEA State or Switzerland which is substantially similar in character to the benefits, allowances and credits listed above may also be allowable.