Free childcare in 2023 Budget - who can claim it and when
Jeremy Hunt has promised up to 30 hours a week of free childcare for working parents in England with children as young as nine months.
The Chancellor hopes that the phased policy, which will be fully introduced by September 2025, will encourage more parents to return to work.
Who will get free childcare?
Under the current system, eligible parents of three and four-year-olds are entitled to 30 hours of free childcare each week, for 38 weeks a year. Jeremy Hunt announced on Wednesday that the scheme would be extended to all children over the age of nine months and up to the age of five.
The Chancellor said the funding will start from the moment maternity and paternity leave ends. All parents in a household must work at least 16 hours a week at minimum wage to qualify for the scheme, to prevent non-working parents from claiming the benefit.
How much will it save me?
The Government has estimated the new policy will save a family with a two-year-old child an average of £6,500 a year, assuming they use 35 hours of childcare every week.
When can parents access the new scheme?
The new funding will not be available immediately, with some parents having to wait years to benefit. Working parents of two-year-olds will be eligible for 15 hours of free care a week from April 2024. Parents of children aged between nine months and two years will need to wait until September 2024.
Some families will need to wait more than two years, until September 2025, before they can access the promised 30 hours of free care for all children aged under five.
It means families with children currently aged two and below will need to wait at least a year before benefiting from any free care and tackle rising costs alone in the meantime.
What other help is available in the meantime?
Parents can use an existing scheme to cut their nursery bills known as “tax-free childcare”. This provides a 20pc tax break on money spent on childcare and is worth up to £500 every three months – up to a maximum of £2,000 a year – for each child.
This rises to £1,000 every three months if the child is disabled, up to a maximum of £4,000 for the year.