Understanding Your Childcare Funding Options
We know that working out how to pay for childcare can sometimes feel complicated, particularly with the different funding schemes and payment options available to families. Understanding what you may be entitled to can make planning your child’s nursery place a little easier.
At Magnolia Tree, we accept a range of government funding and childcare payment schemes, giving eligible families different ways to help with the cost of their childcare. Here’s a guide to the main options and how they work.
Available Funding Options
Government-Funded Childcare
There are two main government-funded childcare offers available to eligible families:
Up to 30 hours of funded childcare for eligible working families
15 hours of funded childcare for eligible 3 and 4-year-olds
30 Hours of Funded Childcare
Eligible working families can receive up to 30 hours of funded childcare each week during term time. This is available for eligible children from 9 months old up until they start school.
Your funding will usually begin from the term after your child becomes eligible. Eligibility generally depends on your working circumstances and income, and some families taking parental leave or receiving certain statutory payments may also qualify.
There are additional eligibility requirements, so we recommend checking the Government's childcare funding eligibility checker for the most up-to-date information.
15 Hours of Funded Childcare for 3 and 4-Year-Olds
All 3 and 4-year-olds in England are entitled to 15 hours of government-funded childcare, regardless of their family's income or circumstances.
The funding becomes available from the term after your child turns three.
At our nursery, these hours can also be stretched across the year, allowing families attending throughout the year to receive a consistent number of funded hours each week.
Making Your Funded Hours Go Further
Government funding is provided for 38 weeks of the year, in line with the school year. As our nursery is open for 51 weeks of the year, we can stretch your funded hours across the year.
This means rather than receiving a larger number of funded hours during term time and none during the school holidays, your hours are spread more evenly throughout the year.
For families using the full 30-hour entitlement, this equates to:
22 funded hours per week for children attending all year
27 funded hours per week for children attending Term Time Only
For those eligible for 15 hours of funding, the stretched equivalent is:
11 funded hours per week for children attending all year
13.5 funded hours per week for children attending Term Time Only
Spreading the funding across the year can provide families with a more consistent number of funded hours each week.
How Do I Apply for Funded Childcare?
If you think you may be eligible for funded childcare, you'll need to apply through the Government's childcare service.
The process is straightforward:
Create a Childcare Account through the Government website.
Complete your funding application.
If your application is successful, you will receive an 11-digit eligibility code.
Provide this code to us and complete our nursery funding form.
Make sure your child is attending the nursery on the relevant Headcount Day.
Claiming Your Funded Place
Before the start of the term, you'll need to have completed our funding form and provided your eligibility code.
Tax-Free Childcare
Tax-Free Childcare is another Government scheme that can help eligible working families with their childcare costs.
For every £8 you pay into your Tax-Free Childcare account, the Government adds £2, meaning the Government contributes 20% towards your childcare costs.
You can receive up to £2,000 per child, per year through the scheme.
Eligibility is generally based on your working circumstances and income, and some families receiving Universal Credit childcare support or using a Childcare Voucher scheme cannot use Tax-Free Childcare at the same time.
Other eligibility conditions apply, so please check the Government's latest guidance to see whether you qualify.
How Does Tax-Free Childcare Work?
Once you've established that you're eligible:
Set up a Childcare Account through the Government website.
Pay money into your account.
The Government adds an additional 20%.
Search for and connect our nursery to your account.
Use the account to make payments towards your nursery fees.
Reconfirm your eligibility every three months through your online account.
Workplace Nursery Scheme – e.g. Enjoy Benefits
Another option that may be available to some families is a Workplace Nursery Scheme through companies such as Enjoy Benefits.
This scheme allows eligible employees to pay their nursery fees through a salary-sacrifice arrangement. By paying for childcare from your gross salary, you may be able to reduce the amount of Income Tax and National Insurance you pay.
The scheme can be used for children from birth until they reach school age. Most schemes require monthly nursery fees of at least £890 to qualify.
How Does the Workplace Nursery Scheme Work?
The process involves your employer and your chosen nursery working together:
Your workplace partners with your chosen nursery.
Your nursery fees are paid for by your workplace.
The cost is deducted from your gross salary.
As a result, you may pay less Income Tax and National Insurance.
You can find out more about the Enjoy Benefits Workplace Nursery Scheme here.
We're Here to Help
We understand that childcare funding and payment schemes can be difficult to navigate, particularly when you're trying to work out which options apply to your family.
If you're unsure about your eligibility, have questions about how funding works at our nursery, or are concerned about managing your childcare costs, please get in touch with our team.
We're always happy to talk through the different options with you and help you understand what support may be available. Just drop us an email and we can arrange a meeting to go through it.
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