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Funded Hours for Childcare 

Part 1 - How funded hours work at the moment

Who gets it at the moment (before April 2024)?

Most parents of 3-4 year olds, and some parents of 2 year olds, are entitled to funded hours discounts. These are funded by the central government and paid directly to us via the local councils, depending on which borough our nursery is located in.

Here are the rules for the different types of funded hours. Please note the website childcare choices is an excellent resource for working out if you qualify for any of the below and has most of the links you need to apply.

15 hours free childcare for 2-year-olds

In order to be eligible for free childcare for your two-year-old, you must either be in receipt of a qualifying benefit or your 2-year-old child must fit into one of the categories of children who have additional needs.

The qualifying benefits are:

  • Income Support

  • Income-based Jobseeker’s Allowance (JSA)

  • Income-related Employment and Support Allowance (ESA)

  • Universal Credit – if you and your partner are on a low income from work (this usually means a combined income no more than £15,400 a year after tax)

  • Child Tax Credit and your family have an annual income of no more than £16,190 before tax

  • The guaranteed element of State Pension Credit

  • Support through part 6 of the Immigration and Asylum Act

  • The Working Tax Credit 4-week run on (the payment you get when you stop qualifying for Working Tax Credit)

Note: If you do not qualify for the benefits above because you are subject to immigration control, you may still qualify for 15 hours free childcare. You must still be on a low income (see FAQ below).

 

Even if you are not receiving a qualifying benefit your 2-year-old can still get free childcare if any of the following apply:

  • They’re looked after by a local council

  • They have a current statement of special education needs (SEN) or an education,health and care (EHC) plan

  • They get Disability Living Allowance

  • They’ve left care under a special guardianship order, child arrangements order or adoption order

  • You can’t claim benefits because of your asylum seeker status or a no recourse to public funds condition. This only applies in specific circumstances – see FAQ below.

Contact your local council to find out how to apply or if you need further guidance.

15 hours free childcare for 3 and 4-year-olds

This scheme is universal and open to all 3 and 4-year olds. There are no earnings or work requirements.

You should be able to start receiving the childcare from 1 January, 1 April or 1 September following your child’s 3rd birthday.

Contact us or your local council if you need further guidance.

30 hours free childcare for 3 and 4-year olds

Please note the ‘30 hours’ is actually an additional 15 hours (the extended entitlement) which most parents qualify for on top of the 15 hours (the universal entitlement) that all 3-5 year olds qualify for.

To be eligible for 30 hours free childcare for your 3 or 4-year-old, you and your partner must each expect to earn (on average) the equivalent of working 16 hours a week at your national minimum wage (approximately £166 per week, less if you are under 23).

You will still be treated as meeting the earnings requirement if you or your partner are on maternity, paternity or adoption leave – this applies whether you are single or a couple. The earnings requirement also does not apply if you are self-employed and you started your business less than 12 months ago.

You are not usually able to use the scheme if either you or your partner has a taxable income over £100,000.

To receive 30 hours free childcare you will need to apply online through gov.uk. After registering for an account, you will get a code that you can take to your childcare provider. IMPORTANT - YOU MUST HAVE A WORKING CODE TO RECEIVE THE 30 HOURS FUNDING. You need to apply before the term starts or you will have wait until the beginning of the next term.

There is a government helpline if you need help with the application.

Common misconceptions

It’s not all year round and they are not ‘free’ hours, they are subsidised hours

Although it is called 15 or 30 hours ‘free childcare’, this is not completely true. Unless you only attend during term time the hours will actually be less than this, as they are only paid to us for 38 weeks a year, and will be ‘stretched’ across 52 weeks.

It doesn’t start immediately when your child turns 2 or 3


If you qualify, funding always kicks in the term after your child turns 2 (for 2 year olds funding) or 3 (for 3 and 4 year olds funding). So if your child turns 2 in November and you qualify for 2 year old’s funding, it will not start coming off your bill until January.

What can you do proactively? When is this all arranged?

If you think you will qualify for any funding next term, don’t wait for us to contact you, go to the Childcare Choices website and find out what if anything you have to do and what, if any, funded hours you will be entitled to - https://www.childcarechoices.gov.uk/

Near the end of each term (so roughly February, November and August each year) we will contact any parents we think might be going onto funding next term, but we don’t know everyone’s circumstances so be proactive, find out yourself and get in touch with us.

All the council’s have different systems for the funded hours but in all cases it is much harder to get funding for the full term for you if we don’t know about it until the term has started and in some cases you may miss out on funding for the whole term if we do not know that you qualify, so please make sure if you are expecting funding for a term that you have received the email from us at the end of the previous term and responded to it appropriately.

Finally, and this is very important, if you have a code from HMRC for the 30 hours funding for 3-5 year olds you MUST renew it every 3 months. This is particularly important when we move into a new term - if you don’t have a working code on the first day of the term it will be very difficult to get you your 30 hours funding for that term (even if you renewed it on the 2nd day of the term) - parents have been caught out by this before and had to just have 15 hours for a term because they missed their renewal.

Key things you will need to do when we ask about funding

When we do contact you about funding for the next term we will ask you to fill in an online form to sort you into the category of funding you will be getting (if at all) and ask you to download from there a parental declaration form and to email us the following:

  • A SCAN (I'm afraid a photograph won't be accepted) of the parental declaration form filled in and signed

  • A copy of your child's passport or birth certificate - photo is fine for this one - this is to prove their age

  • A copy of a recent bill or bank statement - photo is fine for this one - this is to prove your address

The key is to do all this in as timely a manner as you can.

Part 2 - Changes in funded hours over 2024 and 2025

You will have heard that big changes are coming to the funded hours system next year. Please see below how this will be brought in and how it may affect you.

April 2024

So in April 2024 a new 2 year olds entitlement is being brought in, which will run side by side with the current one for vulnerable children (see part 1 for 2 year olds funding for vulnerable 2 year olds). As with all entitlements you will only qualify from the term after the one in which your child turns 2, so you will only be entitled to this for the Summer 2024 term (April - August 2024) if your child turned 2 before April 2024.

It will only be for 15 hours a week at this point BUT this will not be universal, so it won't be like the 15 hours for 3-5 year olds. Rather the criteria will be exactly the same as for the current 30 hours funding for 3-5 year olds, so based on income, and parents will have to apply to HMRC and get a code (see part 1 regarding criteria for 3-5 year olds 30 hours funding).

Parents can apply from the 2nd Jan 2024 for the code for this entitlement if you think you qualify. You must apply before the 31st of March for your child to begin using the funded hours in April 2024. You must then reconfirm your eligibility every 3 months. Applications for this first stage can be done via www.childcarechoices.gov.uk (please note, you must have a Government Childcare Choices Account set up).  

We don't know yet what the funding rate will be for this new scheme, but this should be announced before we would usually message all our parents in February 2024 so by the time you are contacted about funding for the Summer Term 2024 we should be able to tell you what the change in your fees will be if you get the new funding for 2-3 year olds.

So by this point the funded hours running will be:

  • The old vulnerable 2-3 year olds funding on their rate with their council codes.

  • The old 3-5's year olds funding, either 15 hours with no code or 30 hours with a national/HMRC code.

  • New 2-3 year olds with 15 hours with a national/HMRC code, with the same criteria for the code as the 3-5 year olds.

September 2024

At this point all children who turned 9 months old in the previous term will get the 15 hours funding entitlement as well, but this will be the same as for the 2-3 year olds, so they will need a code and the criteria to get the code will be the same as at the moment for 30 hours 3-5 year olds (see part 1).

Again we don't know yet what the funded hours rate this will be for 9 months - 2 years and probably won't until the Summer of 2024, but again we should know by the time we contact you in late July/August about preparing for funded hours for the Autumn Term 2024 (September - December 2024) we should be able to tell you what the change in your fees will be if you get the new funding for 9 month - 2 year olds.

So by this point the funded hours running will be:

 

  • The old vulnerable 2-3 year olds on their rate with their council codes

  • The old 3-5's year olds, either 15 hours with no code or 30 hours with a national/HMRC code

  • Now 9 month - 3 year olds with 15 hours with a national/HMRC code, with the same criteria for the code as the 3-5 year olds on 30 hours

September 2025

So at this point the 9 month - 2 year olds and the 2-3 year olds will go up to 30 hours funding, on the same criteria as they were previously getting 15 hours, so with the same code. So there will be no 15 hours only children, all funded children from 9 months - 3 years will be getting 30 hours funding or none at all (not to be confused with the old 15 hours funding for vulnerable children aged 2-3, which as far as we know will still be running).

So by this point the funded hours running will be (as far as we know at the moment, this is some way off in the future and there will have been a general election by then so this is all subject to change):

  • The old vulnerable 2-3 year olds funding on their rate with their council codes

  • The old 3-5's year olds funding ,either 15 hours with no code or 30 hours with a national/HMRC code

  • Now 9 month - 3 year olds with 30 hours with a national/HMRC code, with the same criteria for the code as the 3-5 year olds

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