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Daily Mirror
Daily Mirror
Business
Emma Munbodh

Parents told to claim £2,000 tax-free childcare to help with cost of living crisis

The government is to launch a big push for families to claim a £2,000 childcare grant under measures to support households during the cost of living crisis.

Boris Johnson will visit parts of the UK most affected by inflation in an attempt to divert attention from Partygate – a scandal that saw him and Chancellor Rishi Sunak - the face of the national insurance tax hike – fined for breaching lockdown rules.

This week the Prime Minister will travel around Red Wall areas of the country, including the north of England and the Midlands, visiting local businesses and families ahead of the May elections.

Mr Johnson will try to focus attention on "national issues" such as growing the economy and helping families with the cost of living as part of an attempt to reset his troubled administration.

Among these campaigns is understood to be an awareness push on the tax-free childcare allowance, a scheme in which parents can claim up to £500 every three months.

Research published by HMRC earlier this year found that 1.3million homes qualify for the support, but only 282,000 families used it in March this year.

Polling showed that one in five parents did not know that they met the eligibility criteria.

The money can be put towards the cost of nurseries and childminders, as well as holiday clubs and sports centres.

"It's something that is there and is budgeted for and is actually quite a sizable benefit," a Downing Street source said.

"The PM would certainly be keen to see more people made aware of it and encouraged to take it up."

The scheme was first introduced to help women who were struggling to return to work due to childhood (Max Mumby/Indigo/Getty Images)

The tax-free childcare scheme allows parents to claim a tax-free boost on their childcare payments.

If you’re eligible, you can get up to £500 every three months - up to £2,000 a year - for each of your children.

For disabled children, the maximum amount you could get is £4,000.

Helen Whately, HM Treasury’s Exchequer Secretary to the Treasury, previously told The Mirror: “Tax-Free Childcare is a great offer that can help cut the childcare bills.

“I urge families across the UK to take advantage of this support and put extra pounds in their pocket - sign up now and save on your childcare costs.”

The scheme works by parents paying into an online childcare account, with the government adding a certain amount on top.

For every £8 you pay in, you'll get a free £2 added on - up to the limits.

This money - which is added directly into the account - must then be spent on a registered childcare provider, such as nurseries, nannies, after school clubs and play schemes.

You can apply for tax-free childcare if you're single or with a partner.

Under the current rules, you need to be earning at least the minimum wage, for the equivalent of 16 hours a week - the same goes for your partner if you have one.

Self-employed workers are also eligible if they earn this amount too.

Both you and your partner will also have to earn less than £100,000 a year to qualify for the scheme, and you cannot have two accounts for the same child.

You usually have to be working to claim tax-free childcare, but there are some exceptions.

For example, you may still be able to claim if one of you is working and the other gets Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or Employment and Support Allowance.

In terms of the criteria for your children, your child must be aged 11 or under and usually will need to live with you.

They'll continue to be eligible for tax-free childcare until September 1 after their 11th birthday.

If your child is disabled you may get up to £4,000 a year until they’re 17.

To receive this, your child will need to get Disability Living Allowance, Personal Independence Payment or Armed Forces Independence Payment, or be certified as blind or severely sight-impaired.

You can apply for the tax-free childcare scheme via the Gov.uk website.

The system will ask you for information about yourself, such as your National Insurance number, as well as your individual circumstances.

But before you apply, you should check if you even need to pay for childcare.

For example, parents of three and four-year-olds can apply for 30 hours free childcare a week.

You can claim tax-free childcare on top of the 30 hours free childcare.

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