What you need to know if your child is about to turn 3 🎒

What you need to know if your child is about to turn 3 🎒

February 24, 2021

The cost of parenting increases with each year and staying on top of the latest financial information is key if you don’t want to miss out on things such as free childcare. If your child is about to turn 3, make sure to read this post so you don’t risk overspending on childcare. And before you brush it off thinking it’s a small amount, you’ll find that each term you don’t get the full 30 hours, you’re overpaying by £900! That’s £2,700 a year you could use for your child’s future.

Thanks to the government childcare support scheme, every child in the UK aged 3 or 4 is entitled to 15 hours of free childcare per week, regardless of the income of the parents or whether they work or not. This is applied automatically once parents fill out a form that’s normally distributed by childcare providers.

Can I get even more free childcare hours?

A child can qualify for 15 more hours of free childcare per week, making it a total of 30,  if the parents meet the following criteria:

  • Each parent is working and earning at least the equivalent of 16 hours at the national living wage (currently around £605 for anyone over 25 but raising to around £618 per month from April 2021 for people aged 23 and above) 
  • Each parent is earning less than £100,000* per year 

For single-parent families, the child can also benefit from the full 30 hours allowance should their parent meet the criteria above.

*£150,000 if the parent is a critical worker and had worked extra hours because of coronavirus.

Conditions for self-employed parents are different and you will have to estimate your yearly profits in the application process. If you started your business less than a year ago there is no limit on earnings. 

Parents who have been affected by the furlough scheme during the coronavirus pandemic or those on Self Employment Income Support Scheme grant may still get the maximum amount of hours even if they are working less. Check the newest information from the government here.

What happens if the parents are separated and/or living with a partner?

If the parents are separated, it is normally the parent living with the child who applies but if the parents can’t agree then they both apply and HMRC decides who ultimately gets the childcare account.

The complicated bit is when the child lives with a parent and their parent’s partner. Although the partner is not an adoptive or biological parent to the child, the standard criteria still applies meaning both the parent and their partner need to be working and earning at least the equivalent of 16 hours at the national living wage for the child to be eligible for the full 30 hours.

Let’s use this example to visualise it better. 3 year old Annabelle lives with her mother Sophia and Sophia’s partner Liam. Her father, Daniel, lives at a different address.

The conditions for Annabelle to receive the full 30 hours would be the following:

  • Sophia (Annabelle’s mother) has to earn at least £618 per month and not exceed £100,000 per year
  • Sophia’s partner, although he’s not Annabelle’s father, would also need to earn at least £618 per month and not exceed £100,000 per year

Let’s now say that Sophia earns £95,000 per year, Liam earns £110,000 per year and Daniel earns £80,000 per year. 

In this case, Annabelle would only qualify for 15 hours per week because Liam’s earnings would exceed the earnings criteria. So, because Annabelle lives in the same house as Liam, she wouldn’t qualify for the full 30 hours per week.

Now, if Annabelle lived with her father Daniel and he didn’t have a partner living at the same address, she would benefit from the full 30 hours, as he earns over £618 per month but his earnings are still under £100,000 per year. 

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So how and when should parents apply?

“How” is rather simple. All you need to do is go to the government website and follow the simple instructions. You will need to input your National Insurance Number or Unique Taxpayer Reference (UTR), if you’re self-employed. If eligible, you will be issued a 11 digit code which you need to communicate to your childcare provider. 

“When” is the tricky part and the reason behind many parents missing out on hours. 

Few people know that you can already apply once your child is 2 years and 36 weeks old (2y9m), although at Nosso we send parents reminders to make things easy that way. 

If that date is difficult to remember, set yourself a reminder to apply as soon as your child turns 3, ideally on the day, as a way to make sure you don’t risk losing hours.

The rule is that the hours become available the term following the child’s 3rd birthday. Let’s say your child is born in July. You apply for the hours straight away and come September, your child goes to nursery on reduced fees because you already have the 11 digit code to give to your nursery. 

However, if you forget to apply for the hours before the beginning of the autumn term and you only do so, let’s say, in October, then your child won’t benefit from the 30 hours until the beginning of the spring term (January). They will still get the 15 hours that every child is automatically entitled to (nurseries and childminders who participate in this scheme will give you a form).

The most important thing to remember is that the hours are applied from the term following your child’s 3rd birthday (if you apply on time) or after the date your eligibility code is issued on the government website, whichever comes later. 

How much money can parents save?

There isn’t a universal hourly fee for nurseries and childminders but let’s say you pay £6 per hour. A full day (8am to 6pm) would be £60. You would be expected to pay £300 per week. 

15 hours of free childcare would bring your weekly payments down to £210 (equivalent to paying 35 hours).

If you’re eligible for 30 hours then you’d only need to pay £120 per week because you would technically be paying just 20 out of 50 hours per week.

These savings are huge and not applying in time for the start of the term can mean you might have to overpay for almost 10 weeks before you enjoy reduced rates. That’s almost £900 per term down the drain (assuming you’d get the universal 15 hours but not the extra 15). 

Where can I use the hours?

While a lot of nurseries in the UK offer the 15/30 hours, it’s important to know that it’s not compulsory and some choose to not participate in this scheme. There can be many reasons for this, like the fact that the amount the government pays per hour can be lower than what some nurseries choose to charge parents. 

Ofsted-registered childminders can also apply the free hours so if you prefer a childminder to nurseries, you can still benefit from free childcare of up to 30 hours a week if you meet the criteria mentioned at the beginning of this post. 

Nurseries will generally advertise on their website if they offer free childcare (or you could find this info on your local council’s page) but when it comes for finding a local childminder you could benefit from using a platform like tiney which helps parents find Ofsted-registered early years educators in their local area.  

Will I receive 15/30 hours free for the whole year?

There’s a catch here, too. This funding is only available for 38 weeks, not the full 52 weeks in a year. If your child attends nursery full-time then the hours are stretched to cover the whole period which means that if you qualify for the full 30 hours, you’ll actually get around 22 hours a week over the whole year (assuming your child goes in every single week, which isn’t likely).

If my child only goes to nursery for 6 hours a day, 5 days per week, does it mean it’s totally free if I get 30 hours of free childcare?

Again, branding this as free might be misleading since nurseries can charge you for meals, nappies, activities or day trips. So while you don’t pay the hours per se, you will still need to cover some extra cost. 

Know any children turning 3 in February and March? Make sure to pass this article to their parents to avoid missing out on free childcare hours in the summer term which begins in April 2021.