Benefits and Tax Credits: Are you claiming all you can?

Balancing the financial demands of family life can be difficult but there is some help out there towards the costs of raising children. Here we outline some of the benefits, tax credits and other forms of financial assistance to help with general costs of raising a family and specifically with the costs of childcare.

General help for families

Free early learning and childcare sessions
All children aged three and four years old are entitled to at least 12¬Ω hours of free early learning and childcare sessions per week for at least 38 weeks of the year. Sessions can be provided by a range of providers including nurseries and accredited childminders. The government has recently announced that free early years education sessions will be extended to all two year olds ‛stage by stage'. Ask your childcare provider or Family Information Service about these sessions.

Child Benefit
Child Benefit is a weekly tax free government payment available to all parents of children under the age of 17 (19 is your child is disabled). In January, the weekly rate increased and you should now be receiving £20 for your oldest child and £13.20 for your younger children.

You should make a claim for Child Benefit within three months of your child being born or coming to live with you and you will need their birth certificate when you make the claim. For an application form, call the Child Benefit Helpline on 0845 302 1444.

Child Tax Credit
Child Tax Credit is an income-based credit available to all families with an income of less than £58,175 or £66,350 [2008/9 figures] if you have a baby. You do not need to be working to claim it and the amount you receive depends on your income and the number of children you have.

Child Tax Credit is paid directly into the bank, building society or post office account of the main carer and to apply you need to contact the Tax Credit helpline on 0845 300 3900.

Child Trust Funds
If you are a parent with a child born after 31 August 2002, your child should be eligible for a Child Trust Fund voucher worth at least £250. The voucher can be used to invest in a special savings account, including a Shariah compliant account. You and your family can add to the account over the years and your child can access it when they are 18.

You should automatically be sent a Child Trust Fund voucher within a month of receiving Child Benefit.

Returning to work
If you are returning to work after a period of unemployment and have been claiming Income Support you may be eligible for additional financial support to ease the transition back to work.
Speak to your Jobcentre Plus adviser about the Job Grant as well as assistance through the New Deal programme which may include, Childcare Subsidy and Childcare Assist.

Help for working families with childcare costs

If you are a parent and you work, there are two main forms of financial assistance available to help with registered child care costs;
• the childcare element of Working Tax Credit, and
• employer supported childcare, usually called childcare vouchers.

The childcare element of Working Tax Credit
The childcare element of Working Tax Credit is an additional payment for families on low income who work at least 16 hours a week. If you are part of a couple you both need to be working at least 16 hours to be eligible. You can claim for up to 80 percent of your childcare costs for registered childcare up to a maximum of £175 per week for one child and £300 a week for more than one child.

Contact the Tax Credit helpline on 0845 300 3900 for an application form or to check your eligibility. You can also visit the HM Revenue and Customs tax credit checker and input your income and childcare figures to find out how much help you may be able to get from the childcare element at www.hmrc.gov.uk

You will need to keep the Tax Credit office informed of any changes to your circumstances such as change in childcare provider, moving, or a significant change in income.

Employer-supported childcare
If you cannot claim help through the tax credit system, your employer may be able to offer help if they operate employer-supported childcare, which includes childcare vouchers. These are a way of paying for childcare that saves you money on your tax and National Insurance Contributions.

Most companies who offer childcare vouchers operate them through a salary sacrifice scheme. This means that you can agree to take home less pay each week or month (up to £55 a week or £243 a month) and be paid this amount in childcare vouchers. The amount you are paid in vouchers is tax and National Insurance free saving you around £900 a year. If you are a part of a couple these savings can double. As with the childcare element of Working Tax Credit it can only be used for registered childcare.

Visit daycaretrust.org.uk for more information or call then on 0845 872 6251

The Daycaretrust has been working since 1986 to promote high quality affordable childcare for all.