Croeso / Welcome to Help with Childcare Costs Workshop Wrexham April 7 th 2011 David Dallimore: Melyn Consulting
Aims of the day By the end of the workshop, you should: –Understand the range of help with childcare costs available to parents –Be familiar with the Help With Childcare Costs publications –Examine changes to the tax and benefits system –Be able to support parents looking to move into work and training –Be better able to work together and monitor outcomes –Be able to cascade the information to other colleagues 2
3 Help with Childcare Costs general help for employed parents for parents moving into work for parents in education for the parents of disabled children
4 General help for parents Child Benefit Child Tax Credit Foundation Phase Flying Start
5 Child Benefit Eligibility Responsible for a child under 16 (or 18) Eligible to live in UK Amount £20.30 for eldest, £13.40 for others Rates frozen for 3 years By 2013, child benefit will be withdrawn from households with a higher rate taxpayer
6 Child Tax Credit Eligibility Responsible for a child under 16 (or to 20) and parent is 16+ Eligible to live in UK Means tested on income generally less than £40k Amount Family element£545 Child element£2,555 per child Disabled child element£2,800 Severely disabled child element£1,130
7 Foundation Phase Eligibility Term after third birthday Amount Minimum of 10 hours free Foundation Phase early education 37 weeks per year With approved providers
8 Flying Start Eligibility Live in a Flying Start designated area (school catchment areas) Amount Minimum of 10 hours free Foundation Phase early education 37 weeks per year (42 in Wrexham?) With approved providers Starting term after 2 nd birthday
9 Help with childcare costs for employed parents Childcare element of Working Tax Credit Employer-supported childcare
10 Childcare Element of the Working Tax Credit Eligibility One lone parent or both parents in paid work of 24 and 16 hours+ Have caring responsibilities for a child up to Sept after 15 th birthday Use registered childcare Live in UK
11 Childcare Element of the Working Tax Credit Amount Up to 70% of eligible childcare costs Up to maximum of £175 for one and £300 for two+ children Paid for average weekly childcare costs HMRC must be told of changes to circumstances ie. childcare costs change by more than £10, childcare not registered, change in provider, receive employer supported childcare, changes to household income, or working hours.
12 Employer Supported Childcare Salary Sacrifice Employees give up wages in return for childcare vouchers which are then exempt from tax and NIC’s up to £55 for basic rate tax payers Low income families generally better off with WTC Salary Plus Childcare vouchers are given to employees on top of salary Exempt from tax and NIC’s Workplace Childcare / Employer Contracted Care Childcare is provided by the employer directly or indirectly
13 Help with costs for parents moving into work New Deal –for Lone Parents –for Partners –Flexible New Deal –for Disabled People –Work Focused Support for Carers Genesis 2 Job Grant
14 New Deal Eligibility Meet the criteria of the relevant New Deal Programme: –Lone Parents: aged 16 + not in work or working <16 hours –Partners: aged 16 + who work less than 16 hrs per week and whose partner is claiming WTC (or pension credit) –Flexible New Deal: People who have been on JSA for over 12 months (or 6 months in some cases). COMPULSORY –Disabled People: in receipt of disability benefits –WFSC: aged 18+ who care for a disabled child who work <16 hours and can’t access other New Deals. Use registered childcare
15 New Deal Amount –Childcare Assist - can cover childcare costs for the first week of work. It can be up to £175 for 1 child and up to £300 for 2 or more children. –Adviser Discretion Fund - Adviser Discretion Fund can offer up to £300 to New Deal participants to help with the costs of finding or starting work which could include up-front childcare costs. No set criteria for how the money can be spent. –Childcare Subsidy - if an ND participant gets a job offer of less than 16 hours per week, and receives a qualifying benefit (eg. JSA or IS),they may be able to access support through the Childcare Subsidy. The subsidy provides up to £87.50 per week for 1 child and up to £150 per week for 2 or more children. If the criteria are met the subsidy can be for up to 52 weeks.
16 New Deal Amount –Replacement Care – for parents on New Deal with specialist childcare costs for a child with a disability or long-term illness, if childcare costs exceed the current Jobcentre Plus support limits of £175 per week for 1 child or £300 for 2 or more children. –In-work credit - for lone parents starting a job of 16 hours+ which is expected to last at least 5 weeks, have been claiming IS or JSA for at least 52 weeks and are bringing up a child alone. £40 per week is paid on top of earnings for up to 52 weeks. This must be claimed within 5 weeks of starting work.
17 Genesis 2 Eligibility Unemployed parents aged 16+ and living in Wales Amount Free help, support and guidance Free or subsidised childcare Free daytime ‘taster’ courses for those wanting to work with children with free creche
18 Parents in education Assembly Learning Grant FE HE Childcare Grant Parents’ Learning Allowance (HE) NHS Childcare Allowance Hardship Loans / Financial Contingency Fund
19 Assembly Learning Grant FE Eligibility Persons aged 19 years old or over in post compulsory education who are ordinarily resident in Wales on the first day, of the first academic year of their course and taking eligible further education courses. Amount Up to £1,500 is means tested and paid each academic year to help meet the costs of studying.
20 HE Childcare Grant Eligibility Full-time students in HE with dependent children in registered and approved childcare. Student or partner must not receive the childcare element of the Working Tax Credit. Can be applied for before or during your course. Childcare Grant is paid during term times and holidays. Grant is disregarded for benefits inc. housing.
21 HE Childcare Grant Amount 85% of the actual childcare cost subject to a maximum grant of £161.50 a week for 1 child and £274.55 a week for more. The SLC will usually pay it in three instalments, one at the start of each term, with loan and other grants. LA will ask for confirmation of actual childcare costs every term.
22 Parents’ Learning Allowance Eligibility Full-time students in HE with dependent children to help with course-related costs Disregarded for benefits Amount Up to £1,508 a year available. Means tested. The SLC will usually pay it in three instalments with your loan. This is a non repayable grant.
23 NHS Childcare Allowance Eligibility NHS Bursary funded students except those only entitled to a fees only award. Use registered childcare Amount Up to 85 per cent of the costs to a maximum of £126.65 per week for 1 or up to £ 187.75 for 2 or more children. Means tested Available for the full 52 weeks of the academic year and will usually be paid in monthly instalments.
24 Financial Contingency Funds Eligibility Part-time or full-time students in higher or further education who are experiencing financial hardship and, without help, might leave their course Administered by the institution Amount May be made as a loan Other conditions might apply
25 Parents with a disabled child Disability Living Allowance Disabled child element of Child Tax Credit Direct Payments Assisted childcare schemes
26 Disability Living Allowance Eligibility Child may qualify for DLA if they have a physical and/or special educational need and require more help or supervision than other children of the same age. Two components: Care and Mobility. The care component is usually available from aged three months and for the mobility component when they are aged three years Amount The care component is paid at 1 of 3 levels, which range from £18.95 per week to £71.40 per week depending on the level of care the child needs. Applications are complicated.
27 Disabled Child Element of Child Tax Credit Eligibility Generally, if child receives DLA Amount The disabled child element (£2,715 per year) - for each child in the family claiming Disability Living Allowance or who is registered blind; The severely disabled child element (£1,095 per year) - for each child in the family claiming the highest rate care component of Disability Living Allowance.
28 Direct Payments Eligibility Parental responsibility for a disabled child Assessment of need by Social Services Amount Variable depending on need
29 Assisted Childcare Schemes Cymorth Assisted places for 0 to 3’s. Referrals only. WPPA / MYM One sessions per week funded for parents in receipt of IS, JSA or IB. CPCKC Assisted places for 3 to 14 yrs (with specific situations) Helping hands: 1:1 support in out of school care
30 April 2011 Tax & Benefit Changes Tax Credits At present, tax credits are withdrawn by 39p for every pound that their income exceeds that threshold. Thresholds are £6,420 a year for those receiving both working tax credit and child tax credit and £16,190 for those receiving only child tax credit. From April 2011, the taper will increase to 41p in the pound. Therefore, the family element, currently guaranteed at £545 if annual income is £50,000 or less, will start to reduce by 41p for every £1 when income reaches £40,000. Child element of child tax credit - will be increased by £150 above indexation from April 2011. It will then rise by a further £60 from April 2012. RPI (5.5%) and CPI (4.4%)
31 April 2011 Tax & Benefit Changes Child Benefit Rates frozen for 3 years To be withdrawn from higher rate tax-paying households from 2013
32 April 2011 Tax & Benefit Changes Childcare Maximum childcare costs reduced from 80% to 70% Those who receive childcare vouchers or those who turned down childcare vouchers to claim the childcare element of working tax credit will need to revisit their decision Working Tax Credit eligibility - couples will have to work at least 24 hours a week, with one partner working at least 16 hours (from 2012)
33 April 2011 Tax & Benefit Changes Childcare Example For example, a family with two adults and two children, working more than 30 hours, earning the average wage of £25,000 a year, with childcare costs of £150 per week. £8,738.80 in 2010-11 £8,157.20 in 2011-12 taking account of the rise in each child element by £180, the increase in reduction taper to 41%, the reduction in childcare costs from 80% to 70%, the freeze on basic working tax credit and 30-hour elements and an estimated Consumer Price Index of 3.1%
34 WAG Policy Statement on Childcare Affordable Childcare Increase awareness of financial support (DWP, JCP & FIS) Childcare for older children to be eligible for WTC Survey of affordability Develop Social Enterprise childcare Improve childcare businesses Offer Flying Start and Foundation Phase more flexibly to meet parents’ childcare needs