Tax-Free Childcare – The Northern Ireland Position

Posted in : Supplementary Articles NI on 2 May 2017
Aoife Hamilton
Employers for Childcare
Issues covered:

Tax-Free Childcare, a new Government scheme to help working parents with their childcare costs, does apply in Northern Ireland. However, the situation with regards funding for childcare is different to that which applies in England (specifically in relation to the much vaunted 30-hour free childcare rule) and we asked Aoife Hamilton Policy and Information Manager at Employers For Childcare to explain the situation for our NI readers. Aoife writes:

Tax-Free Childcare launched on Friday 21 April initially for parents with children under the age of 4 or parents who have a child with a disability who is under 17 years of age. The scheme is due to be rolled out to all eligible parents across 2017.  

Under the scheme, eligible parents can open a childcare account for each child. They pay 80% of their child’s childcare costs, with the additional 20% topped up by the Government, up to a maximum of £2000 per child per annum (£4000 if the child has a disability).

In other words, for every £8 put into the account, the Government will add £2. To access the maximum amount, a parent would have to be paying £10,000 per annum on childcare for their child.

The majority of parents will not be paying this much for childcare and therefore their savings will be less. For example, if a parent is paying £5000 a year for their child’s childcare they will pay £4000 into the account and receive £1000 from the Government.

Eligibility criteria apply, including that each parent (or one parent in a single parent household) must be working for a minimum of 16 hours per work and earning between £120 per week and £100,000 per annum. The scheme is open to parents who are self-employed.

At Employers for Childcare, we have produced a guide called ‘Big Changes, Big Choices’ which explains the new scheme and the eligibility criteria and compares it with other forms of financial support with childcare costs. The guide also contains FAQs and some practical examples to assist parents in working out whether they will be better off on Tax-Free Childcare.

There are other forms of support available, including Childcare Vouchers and the childcare element of Tax Credits and, for many parents, they will be better off accessing support through these schemes rather than through Tax-Free Childcare. It is vital that parents are aware of the range of supports available and make the best choice about what form of support to access as, if they switch to Tax-Free Childcare, they will not be eligible for any other form of support with their childcare costs.

It can be complicated for parents to work out what form of support is best for them and it will very much depend on each family’s circumstances. We are urging all parents to call our Family Benefits Advice Service Freephone on 0800 028 3008 because our advisors can provide personalised, confidential and impartial ‘better off’ calculations. We are continually updating the ‘Big Changes, Big Choices’ guide as more information is made available, so you may wish to check our website on a regular basis

30 Hours Free Childcare – Does Not Apply in NI

While the Government is linking the introduction of 30 hours free childcare with the introduction of Tax-Free Childcare and is advertising both on the Childcare Choices website, this does not extend to Northern Ireland and parents here will not be able to avail of the offer – 30 hours free childcare will be available for families in England only. At the time of the Spring Budget, we produced a news article which may help to set out the situation in Northern Ireland for you:

This article is correct at 02/05/2017

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Aoife Hamilton
Employers for Childcare

The main content of this article was provided by Aoife Hamilton. Contact telephone number is 028 9267 8200 or email

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