Anyone else had this problem with child care costs on tax credits?

coffeegirl_3

I live in Scotland and my 3 year old daughter goes to private nursery for 21 hours per week. I receive Working and Child tax credit with extra added on for child care costs, this covers 80% of the nursery fees. In Scotland 3-5 year olds receive free nursery places which equate to 12.5 hours per week. My problem is this, I have been told by the nursery that as my daughter is now 3 the child care costs change, I still pay the same amount I was paying before she was turned 3 but I now receive a refund from the Local Authority for the free child place. I received a cheque this week for £441. Do I have to report this to HMRC? Bearing in mind that I still have to pay £71 per week, if HMRC are notified will they cut my funding? I will receive these cheques every 4 months, so I cannot afford to have my funding cut by more than a half, and pay the full amount of nursery fees and wait for 4 months to get my money back from the Local Authority? The cheques will not be issued any earlier than 4 months, so what do I do? Anyonel else had this problem?

[Deleted User]

You need to notify TCO of the amount you actually pay.

So the total cost minus the amount covered by the free funding.

As TCO are covering 80% I don't see you being worse off, it mathematicaly works out that that you are better off if you are now covering 20% of a lower amount of childcare costs.

silvercar

If you pay £71 and get 80% back, you should be getting £56.80 back in CCC, leaving you to fund £14.20 a week.

I don't know how many weeks £441 represents, but if you are now receiving refunds for 12.5 of the 21 hours, proportionally you would be funding 8.5 hours approximately £42.26. So now you will get 80% of the lower figure back ie you will be left to find £8.45 a week.

Clearly funding £8.45 is better than £14.20, but it does leave you with a problem if you only get the funded hours reimbursed every four months. Probably time to speak to the nursery and see if they can receive the funding direct rather than you laying out. You can't be the first person to be in this situation.

Do check that funding is the same in term time as the school holidays. I'm not sure if the 12.5 hours funded only applies to term time.

brightongirl22

i'm almost certain the free 12.5 hours are term time only. I thought nurseries were meant to claim back your free 12.5 hours and deduct them from your fees themselves?