800,000 families missing out on up to £2,000 support, government warns

Hundreds of thousands of families could be missing out on tax-free childcare amid the cost-of-living crisis that continues to hit household finances hard.

Government figures released on Wednesday have shown that 512,415 families received up to £2,000 towards the cost of their childcare during the previous tax year, up from 374,135 the year before.

But recent research from HMRC has shown around 1.3 million families are eligible for the scheme - meaning around 800,000 are missing out on claiming.

For every £8 that families pay into their Tax-Free Childcare online account, the government will give a £2 top-up, allowing parents and carers to claim a tax-free boost on their childcare payments.

Those eligible can get up to £500 every three months for each child.

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

The scheme is available for children whose parents or carers;

• Who have children up to 11 years of age, or 17 if they have a disability

• Earn less than £100,000 each year

• Earn at least minimum wage or living wage for 16 hours a week

• Do not receive tax credits, universal credit or childcare vouchers

It can then be then used on approved childcare, such as childminders, nurseries and nannies or for after school clubs and play schemes.

Parents and carers who want to check if they are eligible, or apply to claim, can follow this link to do so.

Watch: Govt poised to announce multi-billion pound cost of living package

On Tuesday, Jonathan Brearley, chief executive of energy regulator Ofgem, told MPs that the energy price cap, which limits how much providers can raise prices, is expected to increase to £2,800 a year in October.

Ofgem’s prediction is a huge leap on April’s previous price cap increase of 54% to £1,971.

Food and fuel prices are also on the rise, causing families to further tighten their purse strings.

Labour shadow education minister Helen Hayes said the uptake of free education and childcare places for two-year-olds is “pitifully low”.

“More than half of families with two-year-olds do not access any formal early years education or childcare at all while a shocking 65% of eligible two-year-olds are not receiving the full free entitlement,” she said.

“What is the minister doing to increase the pitifully low uptake of free two-year-old places?”

Education minister Will Quince said: “She is absolutely right that the two-year-old disadvantage offer take-up is much lower than we want it to be. In truth, the universal credit childcare offer take-up is lower than we want it to be. In truth, the tax-free childcare offer is lower than we want it to be.

“We all across this House have a duty to promote it more widely and I, certainly, on this side of the House will be.”