Changes to free childcare, but higher earners will still miss out

In the Spring 2023 Budget, the Government laid out plans to shake up the current free childcare system – but many higher earners will be disappointed to find that the changes keep them excluded from the scheme.

The existing childcare rules mean that parents are eligible for up to 30 hours of free childcare if their children are aged three to four.

Eligibility also depends on if you are employed or self-employed, the number of hours you work, and your income.

If you or your partner have an expected adjusted net income of over £100,000 in the current tax year, you will not be eligible.

The changes, which will be staggered over the next couple of years, will see many families in the UK benefit from free childcare at an earlier age, however, the £100,000 annual income cap will remain.

Timeline of changes

  • April 2024 – Working parents of two-year-olds will be able to access 15 hours of free childcare per week.
  • September 2024 – Children from the age of nine months will be eligible for 15 hours per week of free childcare.
  • September 2025 – Working parents of children under the age of five will be entitled to 30 hours of free childcare per week.

The changes will be welcomed by many adults in the UK who will be able to return to work at a much earlier date.

However, higher earners will not see this benefit due to the income restrictions, which have not changed.

If you’d like more advice on the current childcare rules or want more information on the upcoming changes, please contact us.

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