Martin Lewis is urging families with a combined household income of less than £40,000 to check if they qualify for Universal Credit and other state-funded support, including childcare. The financial guru told viewers of The Money Show Live to use an online benefits calculator to make sure they are not missing out on crucial financial support.
The consumer champion shared different ways for families to access free childcare, however, it’s important to be aware that in Scotland, early learning and childcare is free to parents as it is funded by the Scottish Government. Parents can get up to 1,140 hours of funded early learning and childcare each year - the equivalent of around 30 hours per week in term time - if your child is three or four years old, but some two year olds are also eligible.
To find out what childcare is available in your area, visit your local council’s website here.
Martin’s rule of thumb if you are paying for childcare: “If your family income is under £40,000 then get on to the internet and do a benefits calculator to see if it’s likely that you are entitled to Universal Credit.
“I am not saying you are, I’m saying it’s worth doing the check to see if you are.”
He went on to say that if you are already on Universal Credit and you’re not getting money for childcare you may be due up to 85 per cent of your childcare costs, but warned there is a cap on that.
Similarly, people on Tax Credits could be due up to 70 per cent of childcare costs, although different caps apply.
The founder of MoneySavingExpert.com also explained about the Uk Governments Tax-Free childcare scheme, which isn’t free but does provide a bonus.
Martin explained: “It only applies if you work and you earn the equivalent of 16 hours per week at National Minimum Wage.”
He added that if you’re in a couple, you both need to be working 16 hours per week to qualify.
To create a Tax-Free childcare account all you have to do is create one on the GOV.UK website here.
Martin highlighted how the scheme provides eligible working families with up to £500 every three months, or £1,000 if their child is disabled, towards the cost of holiday clubs, before and after-school clubs, childminders and nurseries, and other approved childcare schemes.
For every 80p deposited into a Tax-Free Childcare online account, families will receive an additional 20p in UK Government top-ups, and it is available for children aged up to 11, or 16 if the child has a disability.
He warned: “There are 800,000 people eligible for Tax-Free Childcare, eligible for free money from the state, but this scheme has been complicated and under-publicised and many of you are missing out.”
In a nutshell: How the scheme works
The scheme offers a 25% UK Government funded top-up on money deposited into Tax-Free Childcare accounts, which can be used to pay a registered childcare provider.
Accounts can be opened at any time of the year and can be used straight away. Money can be deposited at any time and used when needed.
For example, if parents and carers have school-aged children and use holiday clubs during school holidays, they could deposit money into their accounts throughout the year. This means they could spread the cost of childcare while also benefiting from the 25% top-up.
Any unused money that is deposited can be simply withdrawn at any time.
Find out more about Tax-Free Childcare on GOV.UK here.
What is an online benefits calculator?
Online benefit calculators quickly work out if you are missing out on any benefits and best of all, they are completely free, independent and confidential to use - so there’s nothing to lose.
In just a few minutes you could find out how much you may be able to claim in extra support, just by entering details about yourself, your residential status, your working status and any savings you have.
You can use an independent benefits calculator to find out:
- What benefits you could get
- How to claim
- How your benefits will be affected if you start work
Where to find help
Advice Direct Scotland
This online tool is the first to fully integrate devolved benefits, including the Scottish Child Payment.
It provides a free and impartial assessment of entitlement to a range of benefits such as Universal Credit, crisis grants and support payments.
Turn2us
Information on income-related benefits, Tax Credits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work or change your working hours.
Policy in Practice
Information on income-related benefits, Tax Credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit, how these are calculated and how your benefits will be affected if you start work or change your working hours.
entitledto
Information on income-related benefits, Tax Credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work.
What you will need
You will need accurate information about your:
Savings
Income, including your partner’s
Existing benefits and pensions (including anyone living with you)
Outgoings (such as rent, mortgage, childcare payments)
Latest Council Tax bill
To keep up to date with the latest benefits news, join our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out four times each week - sign up here.
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