Government Funded Childcare from 2024
The Government funded childcare arrangements are changing in 2024. Below sets out those changes. However, we would point out that for us, as a provider, the key issue is around what the funding rates are and if all ages will be adequately funded. Current and previous rates of funding do not cover our own rate of pay and we are grossly underfunded and undervalued. We welcome the communication on the increase rate for 2 year olds and we look forward to further clarity on the rates for 1, 3 and 4 year olds. Unfortunately we will not be entering into any agreements until the funding rate covers the quality of service, care and education that we provide.
The Government has also changed the staff member:child ratio for toddlers from 1:4 to 1:5. This puts extra pressure on our workforce and is massively under-funded as funding rates do not match the level of service we provide. In practice this measure depends on the age, stage and needs of the specific children who are booking looked after. Therefore we have decided to remain at a ratio of 1:4 for our two year olds. This may change in the future but we will not compromise on the level of supervision, care and education that our children receive.
We, as a nursery, are not alone in our concerns set out above as well as wider issues around the sector’s workforce crisis. We are liaising closely with our industry bodies to put these concerns in front of the Government, to ensure that all children receive the high-level of care and education that they deserve.
The Government’s announcement includes:
Families with children aged between nine months and two-years-olds are not currently eligible for any funded hours. However, the Government has announced that:
- from September 2024, all eligible working parents of children aged nine months up to three-years-old will be able to access funding for 15 hours per week of education and care for 38 weeks of the year.
- from September 2025, all eligible working parents of children aged nine months up to three-years-old will be able to access funding for 30 hours per week of education and care for 38 weeks of the year.
Families with children aged two are currently eligible for 15 hours per week of funded care and education for 38 weeks of the year, if they receive any of the following benefits:
- Income Support
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Universal Credit, and your household income is £15,400 a year or less after tax, not including benefit payments
- the guaranteed element of Pension Credit
- Child Tax Credit, Working Tax Credit (or both), and your household income is £16,190 a year or less before tax
- the Working Tax Credit 4-week run on (the payment you get when you stop qualifying for Working Tax Credit)
A child may also be eligible if they:
- are looked after by a local authority
- have an education, health and care (EHC) plan
- get Disability Living Allowance
- have left care under an adoption order, special guardianship order or a child arrangements order
In addition, the Government has announced that:
- from April 2024, all eligible working parents of two-year-olds will be able to access funding for 15 hours per week of education and care for 38 weeks of the year.
- from September 2025, all eligible working parents of children aged nine months up to three-years-old will able to access funding for 30 hours per week of education and care for 38 weeks of the year .
Three- and four-year-olds
Currently, all three- and four-year-olds can access 15 hours per week of funded care and education for 38 weeks of the year, regardless of the income or working status of their parent or carer. This is often described as a ‘universal offer’.
In addition, eligible working families of three- and four-year-olds can currently access 30 hours a week of funded care and education for 38 weeks of the year.
The Government is not currently proposing any changes to the funded entitlements for three- and four-year-olds.
What does the Government mean by ‘eligible working families’?
Families have to meet certain income requirements to be eligible for the current 30-hour offer for three- and four-year-olds, and the new yet-to-be-introduced offers for children aged nine months and over.
This eligibility criteria applies to each parent or carer in dual-parent households and the lone parent or carer in lone-parent households.
To be eligible, each parent or carer must:
- earn more than the equivalent of 16 hours at the national living wage or minimum wage per week. This means that over the next three months, you expect to earn at least £1,976 – the National Living Wage if you are 23 or older.
There is no requirement to work a certain number of hours per week – it is all about how much you earn. This means that, for example, if you only work 10 hours a week but earn £20 per hour, you will meet the minimum earning threshold. Apprentices are also eligible as long as they earn the equivalent to 16 hours at the apprentice minimum wage.
- earn less than £100,000 per year. Again this applies to each parent and carer in a dual-parent household. This means that if one parent earned £101,000 and the other earned £20,000, a family would not be eligible, but if both parents earned £99,000, the family would be eligible.
These criteria apply if you are self-employed or on a zero-hours contract and expect to meet the earning criteria on average over the three months after you have applied for your funded entitlement. HMRC will look at data such as your previous earnings to consider whether you are likely to meet the criteria and may contact you for further information if they are unsure.
If you are starting up your own business, you will not be expected to meet the minimum earning criteria in your first year of trading.
If you are not working but you expect to take up paid work within 31 days, you can still apply for 30 hours, as long as you expect to meet the income criteria over the coming three months.
If you live with a partner, you both must meet the above criteria even if one of you is not the child’s parent – for example, if you have remarried or have started living with a new partner. If you are separated/divorced from your child’s parent, the eligibility rules will only apply to the parent that the child normally lives with (and their new partner if they are part of the same household).
If you are on shared parental, maternity, paternity or adoption leave, you can still apply for the 30 hours. If you’re on adoption leave for a child aged three- to four-years-old, you must return to work within 31 days of the date you first apply for the 30 hours offer