Paying for childcare: Special educational needs and disabilities

Funding for childcare

A number of government funding streams are available to help you meet the cost of childcare. Some of these are universally available, some are means tested and some are for parents with a child with a disability.

Child Tax Credit

All parents and carers, whatever their income and savings, can claim Child Tax Credit.

  • It is paid if you are responsible for at least one child or young person who normally lives with you
  • You do not have to be working to claim Child Tax Credit
  • The amount you get will depend on your circumstances and income
  • If you live with your partner your incomes will be added together when your claim is assessed.

For more information please see www.gov.uk/child-tax-credit

Working Tax Credit (WTC) and Universal Credit (UC)

For more information please see www.gov.uk/working-tax-credit or www.gov.uk/universal-credit

Childcare element of Working Tax Credit

  • Parents and carers who work 16 hours or more a week and pay for Ofsted registered childcare are entitled to the childcare element of working tax credit.
  • It can be worth up to 70% of your childcare costs depending on your income and the cost of your childcare.

For more information please see www.gov.uk/childcare-costs-for-tax-credits.

Tax credit helpline: 0345 300 3900.

Disability Living Allowance (DLA)

  • An extra disability element is added to a child tax credit calculation for each child who receives Disability Living Allowance (DLA) or is registered blind
  • A ‘severe disability’ element is added if your child receives the highest rate of the DLA care component.

For more information please see www.gov.uk/disability-living-allowance-children.

Tax credit helpline: 0345 300 3900.

Childcare vouchers

  • Employers may offer childcare vouchers to help with childcare costs for parents and carers who work, make national insurance contributions and pay income tax
  • Childcare vouchers could be in return for a reduction in their pay – known as a salary sacrifice
  • Childcare providers will need to sign up to the individual schemes
  • Childcare vouchers may affect the amount of tax credits they get
  • The online calculator at www.gov.uk/childcare-vouchers-better-off-calculator can help parents and carers decide whether they would be better off taking childcare vouchers or not.
  • Childcare vouchers are being replaced by Tax-Free Childcare, but will remain open to new joiners until April 2018. Parents already using childcare vouchers can continue to do so after this date, as long as the employer continues to offer them.

Tax-Free Childcare

  • For every 80p you or someone else pays in, the government will top up an extra 20p
  • This is equivalent of the tax most people pay (20%), which gives the scheme its name, ‘tax-free’
  • The government will top up the account with 20% of childcare costs up to a total of £10,000 – the equivalent of up to £2000 support per child per year (or £4000 for disabled children)
  • The scheme will be available for children up to the age of 12. It will also be available for children with disabilities up to the age of 17, as their childcare costs can stay high throughout their teenage years

For more information and to apply please see www.childcarechoices.gov.uk

Direct payments for adults or children with a disability

  • Direct payments for children with a disability is money given to families to pay for services and equipment themselves, instead of having them arranged by the local authority
  • These payments may be provided by social care after an assessment process
  • It can be very useful in allowing parents and carers to choose their own childcare package, including support and services that are not routinely provided by community care services
  • Parents/carers could ask for this as part of a short break or as part of a package of care to help them juggle work and caring. To do this, they will need to ask the social worker to arrange for an assessment of their family’s needs.

For more information please see new.devon.gov.uk/educationandfamilies/direct-payments.

This page was last modified: 30th May 2017