Free childcare extended for pre-school children over 9 months old
Eligible parents of children between 9 months old and school age will soon be able to get 15 or 30 hours a week of government-funded childcare during term-time.
Extending this childcare support to children 2 years old and under is one of the measures announced by the Chancellor in the 2023 Spring Budget to help parents with young children go back to work.
With childcare being one of the biggest costs for many households, this extension aims to reduce the financial barrier that prevents both parents from staying in work, while keeping the economy growing at the same time.
Here is a summary of what’s changing with childcare support, when these changes come into effect, and who will benefit from them.
When does this start and who is eligible?
At the moment, parents working over 16 hours a week with an annual income below £100,000 are eligible for up to 30 hours a week of free childcare for children aged 3–4 years. This provision will be expanded to younger children aged 9 months–2 years over the next couple of years.
To be eligible, each parent must still work at least 16 hours per week earning the National Minimum Wage or National Living Wage, with a taxable income of less than £100,000. This means that parents who are trainees may not be eligible.
Those who are eligible can claim a childcare place for their child in the term that starts after they meet the minimum age requirement (after receiving a code for the childcare provider). Terms typically start from 1st January, 1st April, and 1st September.
Extended free childcare will not be available immediately, as some time is needed to prepare and implement the new measures. They will be phased in as follows:
- April 2024 – Free childcare for 15 hours a week for children aged 2–3 years
- September 2024 – Free childcare for 15 hours a week for children aged 9 months–2 years
- September 2025 – Free childcare for 30 hours a week for children aged 9 months–2 years
This means that children who are currently 1–2 years old will not be eligible, but current newborns and babies born in the next few years onwards will benefit.
Though state-funded childcare will be available for younger children, it will still only be provided for up to 38 weeks a year. This also only applies in England, as different schemes are available in Scotland, Wales, and Northern Ireland.
Is there enough childcare support available?
While this is welcome news for those with newborns or in the family planning stage, there are concerns that there won’t be enough places available for parents to claim the extended free childcare when they need it. There is already a shortfall in places due to lack of resources, including staff, and the phased introduction only gives childcare providers a year to turn this around.
As per the Spring Budget, the government will increase funding for nurseries to £204m this year and to £288m next year, and increase the staff-to-child ratio from four children per staff member to five children. These measures are intended to help childcare providers to deliver the extended entitlement, but they may not be enough.
Additionally, the government currently only funds free childcare for up to 1,140 hours a year, which means the full 30 hours a week can only be claimed for 38 weeks. So, if parents want to receive the full amount of hours a week of childcare for the full year, they’ll have to fund the rest themselves.
It’s important to bear in mind that tax-free government childcare cannot be used at the same time as claiming tax credits – including Working Tax Credit or Child Credit – or receiving Universal Credit, a childcare grant or bursary, or childcare vouchers.
For more information on childcare support, government guidance on help paying for childcare can be found online. Or, for help with family financial planning, contact our accountants in Barnsley.