Working families affected by COVID-19 to be given additional support

06 August 2020

In a press release from the Department for Education (DfE), HMRC and MP Vicky Ford, it has been confirmed that working parents or carers will continue to receive financial support until the end of October 2020.This will be the case where they are eligible for Tax-Free Childcare or 30 hours’ worth of free childcare, but they have fallen below the minimum income requirement as a result of the outbreak of coronavirus.

In addition to this, key workers who may have exceeded the income threshold for tax year 2020-21 due to working more hours to help to tackle the spread of COVID-19 will continue to receive support for this tax year only.

By utilising Tax-Free Childcare, offered by HMRC, for every £8 a family pays into their child’s account, they will receive a £2 top-up. This is up to the value of £2,000 per child, or £4,000 per disabled child. This funding can be used towards the cost of qualifying childcare up to the age of 11, or up to the age of 17 for a disabled child.

The Deputy Chief Executive and Second Permanent Secretary of HMRC, Angela MacDonald, said:

HMRC has been providing vital financial support to families during a time when it has been needed most and we will continue to help them as they gradually transition back to a normal life.

We want to make sure families will not be adversely affected by any abrupt change in circumstances, which is why we have extended available support through Tax-Free Childcare to give families that extra boost.”

30 hours free childcare is given to eligible three to four-year olds in England by the DfE, and it is reported that just below 350,000 children benefitted from this in January 2020 alone. More than 55,00 parents have applied for the 30-hour places since lockdown measures were imposed, highlighting how this support is essential now more than ever, and demonstrating why eligibility must be protected.

Vicky Ford, DfE’s Children’s Minister, commented:

“Our 30 hours childcare offer has always been about supporting parents back into work, and in these times, this ambition is now more important than ever. That is why we are again extending eligibility for the government’s childcare offers so that no parent loses out because of a fall in income due to coronavirus.

This builds on our significant financial support for the early years sector – who have been so integral to the UK’s recovery from this pandemic. We are continuing to provide longer term reassurance to nurseries and childminders that are open by ‘block-buying’ childcare places for the rest of this year at the level we would have funded before coronavirus, regardless of how many children are attending.”

In order to remain eligible for both Tax-Free Childcare and for 30 hours’ worth of free childcare, parents need to reconfirm their situation every three months.

HMRC has also continued to provide support to Working Tax Credit claimants, in terms of the cost of childcare, throughout the COVID-19 outbreak. Any parents and carers who receive the childcare element of Working Tax Credits and have continued to pay childcare fees, despite their children not accessing childcare due to coronavirus, must notify HMRC if it is expected that this will continue after 7 September 2020. After that date, HMRC will no longer pay the childcare element for those in that position. Claimants are advised that they should contact HMRC as soon as possible if childcare stops, or if costs for childcare decrease or end. This can be done by contacting the tax credits helpline on 0345 300 3900.


The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.