Can you get 30 hours free childcare under Hunt’s new plans?

A £4bn expansion of free childcare for one- and two-year-olds could be part of a surprise announcement in the current budget to get people back to work.

The government will offer 30 hours a week of free childcare to all children aged one and two, on top of the existing free hours for children aged three and four.

Currently, all families aged three and four receive 15 hours of free childcare per week for 38 weeks. Households may also qualify for 30 hours per week if parents earn the equivalent of 16 hours per week at the national minimum or living wage.

But if a parent earns more than £100,000 a year, he or she falls outside the 30 free hours – and this exception is expected to remain within the new proposals.

Chancellor Jeremy Hunt’s move would come amid concerns over childcare costs, amid wider cost-of-living challenges and inflationary pressures.

Here we look at the current situation with free childcare and how you can benefit from the proposed changes.

CURRENT SITUATION FREE CHILD CARE

Does anyone currently receive free childcare for children under the age of two?

No, there is normally no free childcare for children under the age of two in England.

What is the current free childcare provision for two year olds?

As it stands, you can get free childcare for your two-year-old child for 15 hours a week if you live in England and receive benefits such as income support; means-tested allowance for job seekers; or income-related work and support benefit.

You can also get the free hours if you receive Universal Credit and your household income is £15,400 per annum or less after tax, excluding benefits; Child tax credit, works tax credit (or both) and your household income is £16,190 per annum or less before tax; or you will receive the guaranteed Pension Credit component.

Two-year-olds can get free childcare if they are taken care of by a municipality; have an education, health and care plan; receive a living allowance for the disabled; or have been left out of care on the basis of an adoption order, special guardianship order or child arrangements.

However, you may still have to pay for additional costs such as meals, diapers or travel.

What are three and four year olds entitled to?

All children aged three and four in England currently receive 570 free hours of childcare per year, which equates to 15 hours per week when counting 38 weeks of the year.

The hours must be at a recognized childcare organization and stop when your child starts in the reception class. You can get it from the term after your child’s third birthday.

Which three and four year olds get 30 hours off?

This depends on whether you work; your income and that of your possible partner; your child’s age and circumstances; and your immigration status.

You can usually get 30 hours of free childcare if you (and your partner, if you have one) work; on sick leave or annual leave; on shared parental, maternity, paternity or adoption leave.

If you are on adoption leave for a child aged three to four, you must return to work for 30 hours of free childcare for that child within 31 days of the initial application.

If you are not currently working, you may still be eligible if your partner is working and you receive disability benefits, severe disability benefits, carers benefits, disability benefits, or contribution-based employment and support benefits. You can apply if you start or restart work within 31 days.

In terms of income, you and your partner (if you have one) should each expect to earn at least over the next three months:

• £1,976 if you are 23 or older
• £1,909 if you are 21 or 22 years old
• £1,420 if you’re between 18 and 20 years old
• £1,000 if you are under 18 or a learner

This is at least the National Minimum Wage or Living Wage for an average of 16 hours per week.

You can use an average of how much you expect to earn during the year if you don’t get paid regularly.

Certain types of income do not count towards the minimum amount you must earn to qualify, such as dividends, interest, and income from real estate investments.

If you or your partner has an expected ‘adjusted net income’ of more than £100,000 in the current tax year, you are not eligible.

You must have a social security number and at least one of the following: British or Irish citizenship; fixed or predetermined status, or you have submitted an application and are waiting for a decision; permission to access public funds.

If you have a partner, they must also have a BSN number.

You can submit an application when your child is 2 years and 36 weeks old.

PROPOSED NEW PLAN

What are the new plans for free childcare?

The government will provide 30 hours a week of free childcare to all children aged one and two, on top of the existing free childcare hours for children aged three and four.

Who is eligible?

Full details of any extension are likely in the current budget, but it is expected that the 30 hours will be for working parents as long as neither earns more than £100,000.

Why is the government making the change?

Chancellor Jeremy Hunt is expected to announce the £4billion policy as part of a wider push to tackle Britain’s labor shortage and get more people into work.

For many working parents, the cost of childcare is so expensive that it consumes almost all of their wages. This restricts some from working and discourages others from taking extra hours.

He wants hundreds of thousands more people into work, with support targeting the over-50s, people with disabilities, and people with Universal Credit.

Will daycare centers get even more money?

Yes, Jeremy Hunt is expected to increase the hourly rate paid by the government to childcare providers to meet their existing entitlement to 30 hours per week.

Childcare costs in the UK are among the most expensive in the world, with rising costs in areas such as energy and food, forcing nurseries to increase their costs to a level that some parents can no longer afford.

But underfunding for the current 30-hour provision has closed nurseries, while others have passed the costs on to the parents of younger children.

At the same time, parents complain that once the cost of extras adds up, they’re still left with huge daycare bills despite getting 30 hours of free childcare a week.

What was the political response to the plan?

Childcare looks set to become a major political battlefield ahead of next year’s general election, and Labor has pledged to make it a priority if it wins.

Her MP Stella Creasy, who has campaigned on the issue, labeled Mr Hunt’s plan “economically illiterate” and warned it would boost demand without tackling supply.

Labor has vowed to completely overhaul Britain’s childcare system after labeling it ‘broken’.

Alison McGovern, the shadow employment minister, said any announcement on childcare should be part of a “good reform strategy”.

She told BBC Newsnight: ‘If we talk about childcare tomorrow on Budget Day, I think that’s a good thing. And I think that’s where our agenda should be… We need to know a lot more about how this is going to work.

“This can’t just be a one day announcement and that’s it, we’ll see how it works out. We need proper reform.

“This must be part of a good reform strategy, because we know that the system is not working at the moment.”

What was the first reaction outside politics?

Neil Leitch, CEO of the Early Years Alliance, said the “devil was in the details” about each plan.

“We know from hard experience that what sounds like an impressive investment in theory can be wholly inadequate in practice, so we understand exactly how this announcement will translate into hourly rate changes, especially in light of the extension of the Offering 30 hours to one- and two-year-olds will be key to understanding the impact on the industry,” he said.

The Financial Times cited research from the organization showing that by 2021 the government was giving nurseries around £4.90 for every hour funded, despite estimates that it would cost around £7.50 an hour to care for each child.

Paul Johnson, director of the Institute for Fiscal Studies, said many would welcome any announcement to boost free childcare.

But he cautioned that the “whole system is hugely complex,” adding: “As universal support has expanded, targeted support for the most needy children has declined.”

Purnima Tanuku, executive director of the National Day Nurseries Association, warned that providers cannot “magically” make places.

“I think we really need to see the amounts,” she told BBC Newsnight.

‘The challenges at the moment are, all of a sudden daycare centers can’t just conjure up places because they are in crisis.’

This is the Money podcast