To get completely free childcare in Scotland you need to make use of the Funded Early Learning and Childcare scheme. It is available to all 3-4 year olds and some 2 year olds. There are other schemes that will help you pay for childcare with your pre-tax salary, and others which are benefits. Of course you can use grandparents, other family and friends too. We have lots of information on all the schemes that you can use to help pay for childcare in Scotland below.
What will you learn from this post about accessing free childcare in Scotland?
You will learn:
- Which free childcare schemes are available in Scotland
- Which ones are you likely to be eligible for
- The pros and cons of each
- About other grants and benefits that might help you pay for childcare
At the end of this post I hope you will consider yourself better prepared to access all the childcare necessary for you family.
Why is childcare so expensive? Does it have to be this complicated?
Children need constant attention and vigilance. They need a competent adult to watch that the dont hurt themselves, that they have clean clothes, that they eat, drink, pee and poo safely and normally. Someone needs to talk to them, play with them, understand their needs and help them learn.
If parents can’t do this because they’re out earning money to feed, house and clothe their kids, they need to help. Many don’t have the free and easy access to wonderful grandparents. Childcare providers are registered and background checked, they are generally professionals often with qualifications in their field. Therefore it costs a lot of money.
However there is help out there for parents.
Hopefully you’ve read our overview of free childcare schemes in the UK. You can access this article here.
After reading this article you will leave with a good understanding of which Scottish schemes you can access to gain help affording childcare.
Here is a simple list of free childcare schemes in Scotland
Okay, now you’ve seen how many there are, how much do you think you know about each? How many are you already accessing?
How you access each scheme can differ.
Some are benefits (eg child benefit and Universal Credit) paid into your bank account. You would then have to pay the childcare provider out of your own account (or even pay them up front and then claim it back).
Some schemes give you an online account through which you can add money and your account will get ‘topped up’ with the money you’re eligible for (eg Tax Free Childcare). You then pay the provider with this account.
Some other schemes are claimed directly from the local authority and childcare provider (eg Funded Early Learning and Childcare).
There are combinations of schemes (eg Tax free childcare and childcare vouchers) that can’t be claimed together, i.e you can only have one and not the other.
Now we’re going to go on and look at each scheme in detail.
Funded Early Learning and Childcare in Scotland
16 free hours per week for 3-4 year olds
Parents in England can claim between 15 and 30 free hours of childcare a week for their 3-4 year olds.
There is a similar scheme in Scotland but with some important differences, called Funded Early Learning and Childcare.
If your son or daughter is 3 or 4 years old, you can get up to 600 hours of free childcare a year. This equates to 16 hours a week in term time.
What about 30 hours?
Unlike England, where parents on lower incomes (or fulfilling other eligibility criteria) can claim 30 hours a week during term time; there is no such provision at the moment in Scotland.
However, it is coming. From August 2020, the provision of free childcare for 3-4 year old children in scotland will increase to 1140 hours a year. This means around 30 hours a week in term time.
So, although the current Scottish provision of childcare for some 3-4 year olds falls below that provided in England; it is about to improve. From August 2020 the 30 hours a week will be available to all 3-4 year olds (it wont be means tested), until they start school.
Plus, the new provision of 1140 hours will also include free school lunches.
You’re able to use this childcare at a variety of providers, including nurseries, childminders and playgroups. There is a new framework called ‘funding follows the child’ which means there is greater choice in where you can use the childcare and can use split amounts at different providers.
How you access the childcare depends on your local council and can be really quite complicated. There are different methods employed in different areas. You’re likely to either have to contact the childcare provider (eg nursery) directly or fill out a council application form and list your preferences on it.
The childcare itself is free but it doesn’t cover costs such as nappies for your child and trips that the provider may take them on.
It will begin in the January, April or September (i.e the beginning of the new school term) after your child’s 3rd birthday and last until they begin reception class at school. This applies even if using a non school source eg a childminder.
Warning – the registration period for council nurseries is in january or february and varies depending on which scottish council area you live in. It can be as short as 2 days. Check when the period is for your child’s registration here. For example the registration period for the ‘school year’ (august) in Dumfries and Galloway this year was on the 27-28th February 2019. This applies to nurseries but not other forms of childcare (eg childminders) so if you missed out you would still have other options.
You can gain lots more information here.
TIP → Make Sure you read the website carefully (relating to your specific council area). You need to know exactly when your application needs to be in by. You should ring your preferred providers early and ask what they require.
Can i get free childcare for my 2 year old in Scotland?
If you receive a qualifying benefit and earn less from these than certain thresholds then you’ll be able to access Funded Early Learning and Childcare for your child when they’re 2 instead of waiting until they’re 3 years old.
There are one or two other criteria that would qualify a 2 year old child for this such as being a Looked After Child or being under a guardianship order.
Take a look at the qualification criteria here. There’s a drop down box to choose your local council site for more information.
Tax-free childcare – you need to know about this one
In April 2017, the government launched a new scheme called Tax Free Childcare, designed to overhaul the provision of childcare for working families in the UK. As with all these changes there have been winners and losers.
A one-line description would be that it gives working parents 20% of their childcare costs. For every 80p you pay for childcare, the Tax Free Childcare will give you 20p more (which equals the 20% basic rate of tax, giving the scheme its name). There’s a limit of £2000 of help, for childcare costs totalling up to £10,000, per child, each year.
It replaces childcare vouchers, as we explain below and is operated through your personal ‘childcare account’ on the government website.
You pay money into this account online and after 1-3 days it will appear as available funds. You can then use it to pay your childcare provider. Any provider accepting this form of payment (virtually all of them) should know how to set this up.
The government’s extra 20% bonus on your contributions to your childcare account should be added the next working day.
It is worth noting that others such as grandparents or family friends can contribute to this account for you.
The government bonus contributions are limited to £500 every 3 months, which works out at £2000 per year. This fact is worth some thought if you’re paying a lot for childcare and planning on using all of the allowance (i.e £8000 of your own money a year per child). It means you need to spread your payments to the childcare account out equally in 3 monthly periods so you don’t miss out on some of the available bonus.
Important!! – To maintain access to the tax free childcare bonuses you need to sign into your government childcare account – and contribute to it – every 3 months or more and ensure your details are correct.
What has Tax Free Childcare replaced? Should I keep using childcare vouchers?
Childcare vouchers closed to new applicants in autumn 2018, so going to them is no longer an option. They are still available to those who are still signed up however, for as long as your employer will continue to offer them.
There is a maximum amount you can sacrifice for vouchers per month and it depends on if you’re a basic, higher or additional rate tax payer.
(if you’re a higher/additional rate tax payer and you joined the scheme before 6th april 2011, you can sacrifice £243 still).
- Basic rate tax payer: £243/month
- Higher Rate Tax Payer: £124/month
- Additional Rate Tax Payer: £110/month
A childcare voucher example would be as follows:
- Your Gross Pay: £2000
- Your net pay after tax/NI: £1571
- Salary Sacrifice for Childcare Vouchers: £243
- Your new net pay: £1406
- Your net pay plus your childcare vouchers = £1649
- Saving by using Childcare Vouchers: £78
Which is best (between Tax free childcare and childcare vouchers) is a simple question with a complicated answer. Hopefully these infographics will help you! Please pin them to your Pinterest if they do!
Universal Credit for Childcare
– Complicated and problematic
Universal credit is an almost infamous benefit that is being brought in by the government. It is designed to replace several benefits, paying one amount rather than several smaller sums.
It has been beset with problems since the outset and has received dreadful press. The botched introduction of this scheme is said to have caused financial to harm to thousands of people.
For a scheme that is designed to ‘simplify’ the benefit system, Universal credit is a complete joke. It is the most complicated subject I have researched since I began creating payforparenting.com.
Anyway, here goes.
Universal credit for childcare is available to families across the whole UK (including Scotland, Northern Ireland and Wales), helping to pay for childcare for kids up to age 17. It will pay up to 85% of childcare costs up to a cap.
It is actually really difficult to find an earnings figure above which you won’t be entitled to UC. Everyone is entitled to a standard amount but your entitlement goes down by around 63p for every £1 you earn. So someone on a higher income (eg £50k) would be entitled to zero.
I did a universal credit calculation in the official calculator. The ‘standard allowance’ was £498.89 per month (for a couple with a child but no income), the ‘child element’ for 1 child was an additional 277.08 per month.
Then there is another part called the ‘childcare element’. This is said to help you with up to 85% of your childcare costs (to a limit of £646.35 for one child or £1108.04 for two or more children). This would be instead of claiming Tax Free Childcare. You have to pay the childcare provider directly and keep the receipts to claim the money back afterwards. This can be difficult for families who don’t have money available up front and live month to month.
You can’t claim Tax free Childcare or tax credits at the same time as universal credit.
The help you get from Universal Credit also only applies to two children, there is essentially a ‘two child limit’. This is not helpful for bigger families. There are some exceptions to this rule.
If you do qualify, you also don’t get as much of this benefit if you have more than £6000 in savings. What a fabulous incentive for good financial sense this is. I hope you can tell what I think of the department of work and pensions!
Universal Credit is a huge and complex topic. I found this website excellent at explaining things.
What about grants and benefits to pay for childcare?
This is one of the benefits that is not being superseded by universal credit.
Child benefit is available to parents of all children up to age 16 (and up to 20 if the child is in full time education or training). It is intended to help parents with the costs of raising children. This includes childcare.
There is no limit to the number of children for which you can claim child benefit. If you’re a couple, only one of you can claim for a particular child.
The claim for your first child is worth £20.70 per week and for each subsequent child the claim is worth £13.70 per week. It is usually paid every 4 weeks.
Child Benefit will cease when your child gets too old, leaves full time education or begins a paid job or apprenticeship (over 24 hours a week).
There is a catch for higher earners, with incomes more than £50k. If you earn between £50-60k you’ll be hit with the ‘High income child benefit charge’ which will take a percentage of your child benefit money back through income tax. The closer to £60k you earn the more will be taken back, and if you earn more than £60k you’ll lose all of the child benefit money.
It is still worth claiming child benefit in these circumstances though as you’ll accumulate national insurance credits that go towards your state pension. We’re writing a post on childcare help for higher earners (coming soon!).
Best Start Grants for Children in Scotland
There are several available grants in Scotland for qualifying parents of young children. They are individual payments that come under the broad title of the Best Start Grant.
Pregnancy and Baby Payment
There is the ‘Pregnancy and Baby Payment’ which can give you between £300 and £600 depending on your family circumstances and is paid from your 24th week of pregnancy to when your baby is 6 months old. This is intended to pay for some of the new baby costs you’re very likely to encounter.
As your child grows up there are further grants available.
Early Learning Payment
Parents who are under 18, or parents receiving qualifying benefits can apply for a ‘Early Learning Payment’ which is worth £250. Take a look at the Scottish government website for the dates in which you have to apply for this. Then mark it down on your calendar or in your phone.
School Age Payment
When your children are a little older you can also apply for the school age payment which is also worth £250. You can apply here.
Best Start Foods Grant
This will give you a prepaid card with which you can buy healthy food in shops. It is worth between £17 and £34 a month depending on the age of your child. You can find more information on how to use it here.
Maximising the free childcare available to your family
I hope all the information above has given you an idea of the schemes that can help parents pay for their childcare in Scotland.
Of course free childcare schemes are only one part of the overall childcare plan. You need emergency childcare. You might be lucky enough to have friends or family do regular childcare for you. Do you have to provide childcare in return for anyone else? What about commuting and travel to all these places. What about your job? Can you afford to go part time? So many questions! We address these and more in our other childcare posts.
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