Applications for the new childcare support for two-year-olds, starting in April 2024, opened on January 2nd, 2024.
Applications for up to 15 hours of free early education/childcare for eligible working families in England with a child aged two, opened on the 2nd January 2024. The scheme, which was announced in the 2023 Spring Budget, expands free government-funded childcare, funded from public funds, on the premise that thousands more parents won’t have to choose between a career and a family.It's recommended that eligible working parents of children apply for free childcare before the end of February 2024 for use with a registered childcare provider, as demand will be high, and the availability for these younger children at childcare establishments will be stretched.
Initially, the scheme is open for working parents of two-year-olds, however, the scheme will be extended in September when parents with children aged over nine months, will be able claim the 15 hours of free childcare. The scheme will expand further in September 2025, when the current government (always possible to change with a general election on the cards this year) has said that 30 hours of free childcare a week will be made available to all children under school age.
One of the concerns of the scheme is that the childcare must be given by an approved provider, and for that reason, getting a free childcare place at applicable childcare setting establishments, which are private nurseries, state-run pre-schools or childminders, is hard to find, not helped by the number of care providers in England dropping by about 4,000 between March 2021 and March 2022, according to figures from the Office for National Statistics.
The government is offering £600 incentives for people to become childminders (or £1,200 via an agency) in an effort to increase the number of places available. The government is also increasing the hourly rates it pays providers to deliver childcare to an average of £11.22 per hour for under-twos, £8.28 for two-year-olds, and £5.88 for three and four-year-olds as an incentive for care agencies to take on extra staff to be able to offer more places to offer to eligible families.
The average cost of a full-time nursery placement (50 hours a week) for a child under two in Britain is estimated to be around £15,000, and the estimated cost of equivalent care from a registered childminder is some £13,000, which highlights the need for as much funding help as possible, as this is way beyond the financial capabilities of most parents to be able to afford the cost of childcare, without support, especially during a cost of living crisis.
Quick information on the current different schemes offered to support parents in England
15 hours of free childcare for 2-year-olds
In order to be eligible for free childcare for your two-year-old before the new scheme starts in April 2024, you must 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 for the scheme 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 of no more than £15,400 a year after tax)
Child Tax Credit and your family have an annual household income of not more than £16,190 before tax
Support through part 6 of the Immigration and Asylum Act
The Working Tax Credit 4-week run on
If your child is being looked after by, or funded by, a local council, you may also be able to claim the extra childcare support and should contact their local authority for extra information on any extra funded entitlements or additional funding that may be available.
15 to 30 hours of free childcare funding
Children aged three and four in England are eligible for 15 free hours of childcare a week for 38 weeks a year. Some providers will allow you to ‘stretch’ the hours over 52 weeks, using fewer hours per week. It doesn't matter how much you earn or how many hours you work. An approved provider must give the care; if the provider isn't an approved provider, then there will be no funding given, so informal providers such as grandparents don’t count – and the support stops when your child starts reception class.
All children in this age bracket are eligible for 15 hours of free childcare. Eligible working parents, a single parent or carers of children aged 3-4 can also apply to get an additional 15 hours of additional hours, bringing their total up to 30 hours a week
Tax-free childcare
Working parents can receive support via a 25% top-up from the government, based on their childcare costs. The government pays £2 for every £8 that families contribute, up to a maximum of £2,000 per child per year (£4,000 for disabled children), for use with childminders, nurseries, nannies, and after-school clubs. Again, if the provider isn't an approved provider, then there will be no funding given. Families must be Earning under £100k and an average of £167 per week (equal to 16 hours at the National Minimum or Living Wage) each over three months, and you need to confirm there haven't been any changes to your situation every 3 months. Applicants can't be receiving Tax Credits, Universal Credit or childcare vouchers.
Working tax credit childcare element
If you're receiving working tax credit you can receive up to 70% of what you pay in childcare from the government up to £175 a week, or £300 a week for two or more children that are under 16 (or under 17 if disabled).
Universal credit childcare element
You usually have to be in work to qualify for the childcare element of universal credit. It covers 85% of childcare costs up to a maximum of £950.92 for one child and £1,630.15 for 2 or more children, who aren't receiving Tax-Free Childcare.
These schemes are only available to families living in England, although a similar government scheme is available in Scotland, Wales and Northern Ireland
To apply for the scheme starting in April 2024, or for further information, go to the Childcare Choices website.