Families in Aberdeenshire miss out on childcare payments

More parents in Aberdeenshire are getting help with the cost of childcare through a government scheme – but many could still to be missing out.

By Alex Ross, Data Reporter
Monday, 24th May 2021, 2:27 pm
Parents are being urged to make use of the tax-free childcare scheme.
Parents are being urged to make use of the tax-free childcare scheme.

Tax-free Childcare topped up working families' spending on childcare by £241 million across the UK last year, with thousands more signing up to the scheme.

But HM Revenue and Customs believes around one million eligible households are not making use of the scheme.

And industry bosses blame the lack of take-up on the current funding system which they say is too complex.

In Aberdeenshire HMRC data shows 1345 parents used the scheme to help with the cost of childcare in 2020-21, up from 1155 the previous year.

Families get £2 for every £8 they put into an account set up for childcare spending.

That means parents can receive up to £2000 per child per year or £4000 for a child with a disability.

It is available for children who are aged 11 and under, or 16 and under if they have a disability.

Yet while more families in Aberdeenshire are benefiting from the subsidy, a comparison with population estimates suggests many are not.

The used accounts were for 1715 children in 2020-21, but the latest population estimates from the Office for National Statistics show there are 36,947 children aged 11 or under in the area.

However, not all children qualify for tax-free childcare.

Applying parents must be in work and earning at least the equivalent of the national minimum wage for 16 hours per week – currently £142.56 for those aged 23 or over but less for younger workers.

They are also ineligible if they claim Universal Credit, tax credits, or certain other benefits, or if one of them earns more than £100,000 a year.

The Early Years Alliance welcomed the increase in uptake but said it was still “significantly lower than projected”.

The National Day Nurseries Association (NDNA) also said the Government must do more to encourage more parents to sign up.

Jonathan Broadbery, NDNA director of policy and communication, said: “We want to see a single online account for families which brings together all childcare support to ensure funding to support a child’s early learning follows that child.”