Eligibility for Tax-Free Childcare

The eligibility for Tax-Free Childcare depends on various factors such as your employment status, income, your child’s age, and your immigration status. This guide breaks down the requirements to help you determine if you qualify for this government scheme.

Eligibility Criteria

1. Employment Status

You may qualify for Tax-Free Childcare based on your employment status:

Employed, self-employed, or a director.
On sick leave or annual leave.
On shared parental, maternity, paternity, or adoption leave, returning to work within 31 days.

If you’re not currently working, you may still be eligible if your partner is working and you receive benefits such as:

Incapacity Benefit
Severe Disablement Allowance
Carer’s Allowance (or Carer Support Payment in Scotland)
Contribution-based Employment and Support Allowance

2. Income Requirements

You and your partner (if applicable) must each earn at least:

£2,379 if you’re 21 or over.
£1,788 if you’re aged 18 to 20.
£1,331 if you’re under 18 or an apprentice.

This is calculated based on the National Minimum Wage for 16 hours per week. Self-employed individuals and those with irregular incomes can use their average yearly earnings to meet this requirement. Note that certain types of income, such as dividends and property income, do not count towards eligibility.

3. Child’s Age and Circumstances

Your child must:

Be 11 or under and usually live with you (eligibility ends on 1 September after their 11th birthday).
Be adopted (foster children are not eligible).

For disabled children, the age limit increases to 16, and parents may receive up to £4,000 annually if the child:

Receives Disability Living Allowance, Personal Independence Payment, or equivalent benefits.
Is certified as blind or severely sight-impaired.

4. Immigration Status

To be eligible, you must have a National Insurance number and meet one of the following criteria:

British or Irish citizenship.
Settled or pre-settled status under the EU Settlement Scheme.
Permission to access public funds as indicated on your UK residence card.

Frequently Asked Questions

1. Can I apply if I’m starting work soon?

Yes, you can apply if you’re starting or re-starting work within 31 days of your application date.

2. What if I have multiple jobs?

You can combine earnings from all jobs to meet the income threshold, including employment and self-employment.

3. Are there exceptions for new self-employed individuals?

Yes, if you’ve been self-employed for less than 12 months, you may still qualify even if your income is below the threshold.