MARTIN Lewis has urged households earning under £40,000 to check if they can unlock free cash for childcare.
The money saving expert’s latest podcast reeled off a host of help parents can get to cover the cost of childcare.
During the episode he urged households with a combined income of £40,000 or less to see if they can claim Universal Credit.
Not only does the benefit pay out up to £617.60 per month, it also unlocks extra help with your childcare.
You can get the “child element” which is worth around £288 per child per month on top of Universal Credit.
And if you are in work you can claim back up to 85% of your childcare costs – which is worth up to £1,740 if you’ve got two or more children.
Usually, extra help with childcare costs through Universal Credit is worth more than claiming tax-free childcare too.
Martin explained how you can check if you are eligible for Universal Credit – and it only takes minutes.
Martin explained: “You should check if you can get help, because you may be able to get quite a substantial amount via the benefits system.
“And it’s important that you check this first before using tax-free childcare, as if you do, claiming tax-free childcare can stop you getting those benefits.”
He added: “If you are earning under £40,000, and you have children and you haven’t checked if you are on Universal Credit, then there are a number of 10-minute checking calculators online where you can check what you are entitled to.”
If you are on a low income you can use either of these three online free benefits calculators to see if you might be eligible for Universal Credit:
If you are eligible, and in work, you may be able to get help paying for childcare, and may get paid up front.
To be able to claim up to 85% of your childcare costs, you have to be receiving childcare through a registered provider.
If you live with your partner, they will also need to be in work, or have a “limited capability for work” – when the Department for Work and Pensions (DWP) decides you are not fit to work.
You can claim up to 85% for childcare costs regardless of how many hours you work, up to a maximum of £1,014 for one child and £1,739 for two or more children.
You can login to your online Universal Credit journal to make a claim.
You will need to provide evidence of your childcare costs, which may include a letter from your registered childcare provider or a bank statement proving you have paid the provider.
You can make a claim up to three months in advance.
Those not on Universal Credit or Tax Credits might qualify for a tax-free childcare account.
For every £8 you pay into the account, the Government will pay you £2.
You can get up to £500 from the Government every three months – up to a maximum of £2,000 a year – for each of your children.
If your child is disabled, you can claim more – £1,000 every three months, up to £4,000 maximum per year.
Anyone eligible can sign up by creating an online childcare account via the Government’s website.
You can claim tax-free childcare at the same time as 15 or 30 hours free childcare hours.
You can get child benefit if you’re responsible for a child aged under 16, or if they are under 20 and in approved education or training.
Child benefit is currently worth £25.60 a week for the eldest child or only child. For each subsequent child, parents get £16.95 a week.
The cash is paid every four weeks and there’s no limit to how many children you can apply for.
Bear in mind though, those who earn more than £60,000 a year have to start paying back some of their child benefit through the High Income Child Benefit Charge (HICBC).
If you or your partner earns £80,000 or more, you have to pay all your entitlement back.
You have to pay the HICBC to HMRC through self-assessment.
The Government is currently in the process of expanding out free childcare hours to parents.
Under the old scheme, all parents received 15 free hours for children aged three and four but some working parents could get 30 hours.
Now parents of two-year-olds who meet the eligibility criteria also get 15 hours free while this will be extended to parents of nine month old’s from September.
You can read more about free hours childcare in our piece here.
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity Turn2Us’ benefits calculator works out what you could get.
Entitledto’s free calculator determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto’s data.
You can use Policy in Practice’s calculator to determine which benefits you could receive and how much cash you’ll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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