Childcare Funding

Early Years Free Entitlement (EYFE)

Currently, Government early years childcare funding is available for all children aged 3 and 4. In practice, the grant is available from the start of the term following your child's third birthday until they start in a reception class. For example:

    A child aged three by:
  • 31st March will be eligible for grant in the Summer Term
  • 31st August will be eligible for grant in the Autumn Term
  • 31st December will be eligible for grant in the Spring term

Grants can only be claimed for children attending nurseries at the beginning of the term. If you think your child may be eligible for a grant next term, you should contact your chosen nursery about this as soon as possible. The Wishing Tree is registered to offer parents the Early Years Free Entitlement (EYFE) grant.

The amount of the grant covers the equivalent of providing your child with up to 5 free 2.5 hour sessions per week at our nursery and for 11-14 weeks, variable on the term being funded.

The extended session beyond 2.5 hours may need to be subsidised further by the parent. This would cover the additional hours provided by the setting plus any extras such as meals, drinks, toiletries and nappies.

We open all year round, however, we are only allowed to claim the EYFE during normal school term times. The grant is paid direct to the nursery, and therefore we will not charge you for the 2.5 hours funded by the Local Authority.

This benefit is available to all, regardless of income or savings. It may be split between more than one provider (including primary school nursery or reception classes) but parents are responsible for ensuring that funding is not claimed for more than five weekly sessions in total. We will ask you to sign a declaration to this effect, and will then put your child forward for the grant when he or she becomes eligible.

Tax Credits

Child Tax Credit is available to any family (which includes lone parents) with at least one child under 16 (or 19 if in full time education). Higher rates of benefit are available for children under the age of one or for children with disabilities. Unlike the old credits, Child Tax Credit is paid direct to the main carer (in practice, usually the mother), who does not have to be in work.

Child Tax Credit consists of a family element and a separate element for each child. The amount depends on how many children there are in the household and how much parents jointly earn. The child element is targeted at the lowest earning households but the family element is available even for relatively high earning families, although at a lower rate.

Working Tax Credit is available to anyone in work, whether or not they have children. It does, however, include an element designed to cover a substantial proportion of eligible childcare costs. Again, the credit is targeted at low earners so that benefit is reduced as household incomes rise. Working Tax Credit is paid as part of the pay packet: the employer deducts the amount of the payment from the tax which he has collected from employees before paying it over to HMRC. For the self employed, the credit is payable direct from the HMRC.

Employer Supported Childcare (Workplace Vouchers)

The Chancellor of the Exchequer announced in his Budget Report in March 2004 that from April 2005 there would be new Tax and National Insurance breaks for employer supported childcare of up to £55 a week per parent or carer. This means that businesses will be able to help their employees to meet the cost of good quality childcare.

How does it work ?

Employers will be able to contract direct with a voucher company to purchase workplace vouchers on behalf of their employees. The amount of the voucher is deducted from the employee's pay (salary sacrifice) and paid over to the voucher company as a gross amount. This means that the employee does not have to bear the costs of the tax or the national insurance and similarly the employer does not pay national insurance on this element either. The voucher company then either issues a paper voucher which is sent to the employee or more commonly transfers the money directly to the nursery or other childcare setting by BACS.

Other Help

Additional government help may be available for lone parents or for students. We can provide telephone numbers of relevant help lines.

We accept vouchers provided by employers under a range of different schemes. Special arrangements can be made with employers who wish to provide subsidised places for staff: these may offer additional tax relief for childcare costs.

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