Confused about tax credits...

MissDVL

Hi, I'm hoping someone might be able to shed some light onto the childcare element of working tax credits for me!

I am a single parent, and I currently claim Working and Child Tax Credits. My son will be going into nursery in a couple of weeks and I need to start claiming the childcare element to help pay for it.

Is the childcare element added ON TOP of what I already receive, or is it a substitute for a certain amount of tax credits I already receive? Also, I know you can claim up to 70% of the costs, up to a maximum of £122 for one child - but is this 70% limit just for the highest claim you can make, or the same for all cases? For example, I will be paying £80 for two days' worth of childcare, does this mean the maximum I can claim is £56? Very confused!

Thanks in advance

princessdon

Put the details into a calculator as the hours worked etc affect it.

They are pretty accurate. Generally it is 70% of what you pay if on a "low income" - but your income will determine the amount. The hours worked and income all affects it so we can't say without details.

Pedent

As I understand it, the 70% of childcare costs is added to the maximum amount you could be entitled to. In your case, your maximum entitlement will go up by 70% of £80/week, i.e. by £56/week.

This entitlement is withdrawn at a rate of 41% of earnings over a threshold. If your earnings were previously so high that all of your entitlement was withdrawn, then you might get less than 70% of your eligible childcare costs. However, as you say that you currently receive tax credits, the maximum amount will already be being withdrawn, so I think you'll get the full £56/week extra.