Croeso / Welcome to Help with Childcare Costs Workshop Wrexham April 7 th 2011

1. Croeso /Welcome to Help with Childcare Costs Workshop Wrexham April 7th 2011 David Dallimore: Melyn Consulting

2. Aims of the day • By the end of the workshop, you should: • Understand the range of help with childcare costs available to parents • Be familiar with the Help With Childcare Costs publications • Examine changes to the tax and benefits system • Be able to support parents looking to move into work and training • Be better able to work together and monitor outcomes • Be able to cascade the information to other colleagues

3. Help with Childcare Costs • general help • for employed parents • for parents moving into work • for parents in education • for the parents of disabled children

4. General help for parents • Child Benefit • Child Tax Credit • Foundation Phase • Flying Start

5. Child Benefit Eligibility • Responsible for a child under 16 (or 18) • Eligible to live in UK Amount • £20.30 for eldest, £13.40 for others • Rates frozen for 3 years By 2013, child benefit will be withdrawn from households with a higher rate taxpayer

6. Child Tax Credit Eligibility • Responsible for a child under 16 (or to 20) and parent is 16+ • Eligible to live in UK • Means tested on income generally less than £40k Amount • Family element £545 • Child element £2,555 per child • Disabled child element £2,800 • Severely disabled child element £1,130

7. Foundation Phase Eligibility • Term after third birthday Amount • Minimum of 10 hours free Foundation Phase early education • 37 weeks per year • With approved providers

8. Flying Start Eligibility • Live in a Flying Start designated area (school catchment areas) Amount • Minimum of 10 hours free Foundation Phase early education • 37 weeks per year (42 in Wrexham?) • With approved providers • Starting term after 2nd birthday

9. Help with childcare costs for employed parents • Childcare element of Working Tax Credit • Employer-supported childcare

10. Childcare Element of the Working Tax Credit Eligibility • One lone parent or both parents in paid work of 24 and 16 hours+ • Have caring responsibilities for a child up to Sept after 15th birthday • Use registered childcare • Live in UK

11. Childcare Element of the Working Tax Credit Amount • Up to 70% of eligible childcare costs • Up to maximum of £175 for one and £300 for two+ children • Paid for average weekly childcare costs • HMRC must be told of changes to circumstances ie. childcare costs change by more than £10, childcare not registered, change in provider, receive employer supported childcare, changes to household income, or working hours.

12. Employer Supported Childcare Salary Sacrifice • Employees give up wages in return for childcare vouchers which are then exempt from tax and NIC’s up to £55 for basic rate tax payers • Low income families generally better off with WTC Salary Plus • Childcare vouchers are given to employees on top of salary • Exempt from tax and NIC’s Workplace Childcare / Employer Contracted Care • Childcare is provided by the employer directly or indirectly

13. Help with costs for parents moving into work • New Deal • for Lone Parents • for Partners • Flexible New Deal • for Disabled People • Work Focused Support for Carers • Genesis 2 • Job Grant

14. New Deal Eligibility • Meet the criteria of the relevant New Deal Programme: • Lone Parents: aged 16 + not in work or working <16 hours • Partners: aged 16 + who work less than 16 hrs per week and whose partner is claiming WTC (or pension credit) • Flexible New Deal: People who have been on JSA for over 12 months (or 6 months in some cases). COMPULSORY • Disabled People: in receipt of disability benefits • WFSC: aged 18+ who care for a disabled child who work <16 hours and can’t access other New Deals. • Use registered childcare

15. New Deal Amount • Childcare Assist - can cover childcare costs for the first week of work. It can be up to £175 for 1 child and up to £300 for 2 or more children. • Adviser Discretion Fund - Adviser Discretion Fund can offer up to £300 to New Deal participants to help with the costs of finding or starting work which could include up-front childcare costs. No set criteria for how the money can be spent. • Childcare Subsidy - if an ND participant gets a job offer of less than 16 hours per week, and receives a qualifying benefit (eg. JSA or IS),they may be able to access support through the Childcare Subsidy. The subsidy provides up to £87.50 per week for 1 child and up to £150 per week for 2 or more children. If the criteria are met the subsidy can be for up to 52 weeks.

16. New Deal Amount • Replacement Care – for parents on New Deal with specialist childcare costs for a child with a disability or long-term illness, if childcare costs exceed the current Jobcentre Plus support limits of £175 per week for 1 child or £300 for 2 or more children. • In-work credit - for lone parents starting a job of 16 hours+ which is expected to last at least 5 weeks, have been claiming IS or JSA for at least 52 weeks and are bringing up a child alone. £40 per week is paid on top of earnings for up to 52 weeks. This must be claimed within 5 weeks of starting work.

17. Genesis 2 Eligibility • Unemployed parents aged 16+ and living in Wales Amount • Free help, support and guidance • Free or subsidised childcare • Free daytime ‘taster’ courses for those wanting to work with children with free creche

18. Parents in education • Assembly Learning Grant FE • HE Childcare Grant • Parents’ Learning Allowance (HE) • NHS Childcare Allowance • Hardship Loans / Financial Contingency Fund

19. Assembly Learning Grant FE Eligibility • Persons aged 19 years old or over in post compulsory education who are ordinarily resident in Wales on the first day , of the first academic year of their course and  taking eligible further education courses. Amount • Up to £1,500 is means tested and paid each academic year to help meet the costs of studying.

20. HE Childcare Grant Eligibility • Full-time students in HE with dependent children in registered and approved childcare. • Student or partner must not receive the childcare element of the Working Tax Credit. • Can be applied for before or during your course. Childcare Grant is paid during term times and holidays. Grant is disregarded for benefits inc. housing.

21. HE Childcare Grant Amount • 85% of the actual childcare cost subject to a maximum grant of £161.50 a week for 1 child and £274.55 a week for more. • The SLC will usually pay it in three instalments, one at the start of each term, with loan and other grants. • LA will ask for confirmation of actual childcare costs every term. 

22. Parents’ Learning Allowance Eligibility • Full-time students in HE with dependent childrento help with course-related costs • Disregarded for benefits Amount • Up to £1,508 a year available. Means tested. • The SLC will usually pay it in three instalments with your loan. This is a non repayable grant.

23. NHS Childcare Allowance Eligibility • NHS Bursary funded students except those only entitled to a fees only award. • Use registered childcare Amount • Up to 85 per cent of the costs to a maximum of £126.65 per week for 1 or up to £ 187.75 for 2 or more children. Means tested • Available for the full 52 weeks of the academic year and will usually be paid in monthly instalments.

24. Financial Contingency Funds Eligibility • Part-time or full-time students in higher or further education who are experiencing financial hardship and, without help, might leave their course • Administered by the institution Amount • May be made as a loan • Other conditions might apply

25. Parents with a disabled child • Disability Living Allowance • Disabled child element of Child Tax Credit • Direct Payments • Assisted childcare schemes

26. Disability Living Allowance Eligibility • Child may qualify for DLA if they have a physical and/or special educational need and require more help or supervision than other children of the same age. • Two components: Care and Mobility. The care component is usually available from aged three months and for the mobility component when they are aged three years Amount • The care component is paid at 1 of 3 levels, which range from £18.95 per week to £71.40 per week depending on the level of care the child needs. • Applications are complicated.

27. Disabled Child Element of Child Tax Credit Eligibility • Generally, if child receives DLA Amount • The disabled child element (£2,715 per year) - for each child in the family claiming Disability Living Allowance or who is registered blind; • The severely disabled child element (£1,095 per year) - for each child in the family claiming the highest rate care component of Disability Living Allowance.

28. Direct Payments Eligibility • Parental responsibility for a disabled child • Assessment of need by Social Services Amount • Variable depending on need

29. Assisted Childcare Schemes Cymorth • Assisted places for 0 to 3’s. Referrals only. WPPA / MYM • One sessions per week funded for parents in receipt of IS, JSA or IB. CPCKC • Assisted places for 3 to 14 yrs (with specific situations) • Helping hands: 1:1 support in out of school care

30. April 2011 Tax & Benefit Changes Tax Credits • At present, tax credits are withdrawn by 39p for every pound that their income exceeds that threshold. Thresholds are £6,420 a year for those receiving both working tax credit and child tax credit and £16,190 for those receiving only child tax credit. • From April 2011, the taper will increase to 41p in the pound. Therefore, the family element, currently guaranteed at £545 if annual income is £50,000 or less, will start to reduce by 41p for every £1 when income reaches £40,000. • Child element of child tax credit - will be increased by £150 above indexation from April 2011. It will then rise by a further £60 from April 2012. • RPI (5.5%) and CPI (4.4%)

31. April 2011 Tax & Benefit Changes Child Benefit • Rates frozen for 3 years • To be withdrawn from higher rate tax-paying households from 2013

32. April 2011 Tax & Benefit Changes Childcare • Maximum childcare costs reduced from 80% to 70% • Those who receive childcare vouchers or those who turned down childcare vouchers to claim the childcare element of working tax credit will need to revisit their decision • Working Tax Credit eligibility - couples will have to work at least 24 hours a week, with one partner working at least 16 hours (from 2012)

33. April 2011 Tax & Benefit Changes Childcare Example For example, a family with two adults and two children, working more than 30 hours, earning the average wage of £25,000 a year, with childcare costs of £150 per week. £8,738.80 in 2010-11 £8,157.20 in 2011-12 taking account of the rise in each child element by £180, the increase in reduction taper to 41%, the reduction in childcare costs from 80% to 70%, the freeze on basic working tax credit and 30-hour elements and an estimated Consumer Price Index of 3.1%

34. WAG Policy Statement on Childcare Affordable Childcare • Increase awareness of financial support (DWP, JCP & FIS) • Childcare for older children to be eligible for WTC • Survey of affordability • Develop Social Enterprise childcare • Improve childcare businesses • Offer Flying Start and Foundation Phase more flexibly to meet parents’ childcare needs

35. Resources