Child care costs can be offset against earnings when calculating Housing Benefit and Council Tax Benefit. The maximum weekly childcare costs that can be offset are £175.00 for one qualifying child and £300.00 for two qualifying children.
Deductions for childcare can be made when a claimant is:
- a lone parent working 16 hours or more each week; or
- part of a couple where both parents works 16 hours or more each week; or
- a couple where one parent works 16 hours or more each week and the other is incapacitated
To qualify the care must be provided by:
- a registered childminder
- a childminding scheme that does not have to be registered
- child care allowed for the calculation of Tax Credit
- an out of hours scheme on school premises or run by a local authority. This only applies if the child is aged 8 or more
A child will qualify until the first Monday in September after their 15th birthday. For disabled children until the first Monday in September after their 16th birthday
How are child care costs calculated?
If the amount of childcare stays the same during term time and holidays we will deduct the actual amount you pay from your earnings (up to a maximum of £175.00 or £300.00).
If the amount you pay varies we will average the cost over the year. For example:
Term time charges
£15.00 per week X by 39 term time weeks each year = £585.00
£40.00 per week X by 13 weeks for school holidays = £520.00
Total amount paid during the year is £1105.00
£1105.00 divided by 52 weeks = £21.25
This means that £21.25 would be deducted from the earnings before we calculated Housing Benefit or Council Tax Benefit.
Further help and advice
If you need any further help or advice please do not hesitate to Contact the Benefit Section.