Tax-Free Childcare: Qualifying children
To be entitled to a TFC payment, the child must be a qualifying child. In this section we explain what that means.
Who counts as a qualifying child?
A child is a qualifying child until the last day of the week in which the 1st September following their 11th birthday falls.
A disabled child is a qualifying child until the last day of the week in which the 1st September following their 16th birthday falls.
Claimants responsible for a disabled child are entitled to a top-up of up to £4000 a year (£1000 per 3 month entitlement period) compared to up to £2000 for non-disabled children.
A child counts as disabled for TFC purposes if Disability Living Allowance, disability assistance in Scotland, Personal Independence Payment, Armed Forces Independent Payment or any allowance or payment from a prescribed state (EEA or Switzerland) which is similar to these benefits is being paid.
A child who is certified as severely sight impaired or blind by a consultant ophthalmologist also counts as a disabled child.
Changes during an entitlement period
The basic premise of TFC is that once in an entitlement period, changes of circumstances that impact eligibility do not apply until the next entitlement period.
However, where a child is awarded a qualifying disability benefit mid-way through an entitlement period, our understanding of the legislation is that the higher £4000 limit should apply from that point on.
Example
Jessica is a single parent with one child. Jessica's entitlement period starts on 1st October and runs for 3 months. She pays in £2000 on the 10 October and receives a £500 top-up. On 15 October DLA is awarded for her child. Jessica pays in a further £2000 on 20 October and receives a further £500 top-up because her child is now classed as a disabled child.
Where, in relation to a disabled child, a person has applied to open a childcare account but solely due to a delay in payment to the child of certain disability benefits, HMRC is unable to grant the application or is able to grant it but only give the £1000 per entitlement period, special rules apply. This means that once the disability benefit is awarded, the relevant maximum for entitlement periods beginning after the delay is increased by an amount equal to the relevant maximum that would, but for the delay, have been available to an active childcare account.
Last reviewed/updated 3 July 2024