The added financial commitments when you are having treatment for cancer can mean that childcare fees are even more difficult to meet. It's important to tell the department you're receiving money from about any change in circumstances, as the amount you receive may change if you are unable to continue working or studying.
Some benefits are due to be replaced by Universal Credit (UC), which was introduced in parts of England, Scotland and Wales from 2013. It will be introduced in Northern Ireland in 2017. Most claimants are expected to be moved to this new single monthly benefit scheme by 2022. You can find out more about UC in means-tested benefits.
From April 2017 Universal Credit for children will be reduced in the same way as Child Tax Credit (see below) whereby it’s limited to two children. You will be expected to start taking steps towards getting back into work when your youngest child turns two (interviews and training with a work coach) and be expected to look for work that fits in during school hours when your youngest child turns five.
If you are responsible for a child under the age of 16 you will receive a tax-free payment for each child you have.
Child Benefit is no longer available as a tax-free benefit to every family regardless of household income. This means that families where a single person earns over £50,000 will be liable to repay some of it as a tax charge (known as the 'High Income Child Benefit charge').
If you decide to continue receiving Child Benefit and pay the tax charge, you will need to fill out a self-assessment tax return.
There are two tax credits: Child Tax Credit (CTC) and Working Tax Credit (WTC) that you may be able to apply for if you're responsible for a child. You may get one, or both of these. The amount you receive will depend on your income and circumstances, for example, if your child receives Disability Living Allowance (DLA) or is registered blind.
If you are aged between 16 and 19, you will need to inform HMRC if you are staying on in full time non advanced education (FTNAE). If you don’t do this then your payment may be reduced or will stop if there is no longer any entitlement.
In 2017 support through CTC will be limited to two children for children born from April 2017. Tax credits (also referred to as 'working-age benefits') will be frozen for four years from 2016-2017. Additionally, people starting a family after April 2017 will no longer be eligible for the Family Element in tax credits. The equivalent in Universal Credit, known as the first child premium, has also been scrapped.
If you can't work because you're ill you may still be treated as working and be able to get WTC. This will depend on the length of time you're off work and what your usual working hours were before you went on sick leave.
To claim CTC and WTC, call the Tax Credit Helpline on 0345 300 3900 and ask them for an application form.
Parents who are working
If you are no longer a student and are in employment you may be entitled to receive childcare vouchers. This is an employee benefit that can save you around £1,000 a year in childcare expenses. This is because childcare vouchers are free from tax and National Insurance contributions.
The value of the childcare vouchers you receive will depend on what rate of tax you pay. If you are self-employed you cannot receive childcare vouchers.
- Basic rate tax payer: £243
- Higher rate tax payer: £124
- Additional rate tax payer: £110
The money will normally be taken out of your salary each month and will go directly to your registered childcare provider through an electronic payment scheme. Speak to your Human Resources department and find out if they run the scheme and who you need to contact (there are a number of companies that distribute the vouchers).
If you are on sick or unpaid leave, your salary will continue to be adjusted by the value of your childcare vouchers. If your sick pay runs out or you are taking unpaid leave, you will not be able to remain in the scheme. You cannot take childcare vouchers if it reduces your sick pay below the statutory rate.
Childcare vouchers can affect the tax credits you receive. Find out if you will be better off taking childcare vouchers or not by using the HMRC calculator.
Tax-free childcare voucher scheme
In autumn 2015 a new tax-free childcare voucher scheme (TFC) was announced. It will offer eligible families a 20 per cent tax break on the first £10,000 of childcare costs for children under 12. This will provide savings of up to £2,000 per child.
Parents will be able to continue signing up for childcare vouchers until TFC is fully introduced in early 2017 and may be able to continue for as long as their employer runs the scheme. However, in some cases the new scheme may offer higher savings so it may be worth switching to this one.
Time off (parental leave)
Every parent is legally entitled to take up to 18 weeks parental leave for each child until their fifth birthday. For each adopted child you will get 18 weeks for each child until their 18th birthday or the fifth anniversary of their adoption – whichever comes first. You will get 18 weeks for each child who qualifies for DLA up to their 18th birthday.
There are restrictions on how much parental leave you can take in a year, and how you can take it. You can find out more about this at www.gov.uk. It's worth speaking to your employer to see if you can arrange extra leave – they don't have to pay you, but it may be that they do as part of your contract.
Shared Parental Leave (SPL)
From April 2015 employed parents may be able to get SPL and Statutory Shared Parental Pay (ShPP). If you are eligible to receive SPL, you can take it in up to three separate blocks and decide how much time you will take along with your partner.
If you have a child aged under six or a child who has a disability and is under 18, you have a legal right to ask your employer to negotiate a working pattern that helps you care for your child. This could be especially important if you are continuing to work while having treatment.
They don't have to fulfil this request, but they do have to consider it seriously. You need to have worked for your employer for at least 26 weeks when you make your application, and you can only make one application a year.
Parents who are studying
Care to Learn
If you are a parent under the age of 20 and studying full or part-time, then you may be able to receive up to £160 (£175 in London) per child towards your childcare or travel costs with Care to Learn.
If you're living in England and studying full-time you may be eligible to receive the Childcare Grant. This could cover as much as 85 per cent of your childcare costs during term time and holidays.
Parents' Learning Allowance
If you are a full time student, the Parents' Learning Allowance could offer you between £50 and £1,573 for 2016/17 depending on your household income. These could be put towards costs such as travel, books or course material.
Children aged three and four-years-old are entitled to 15 hours of free childcare a week for 38 weeks a year. Some two year-olds are also eligible. This has to be spread over at least three days and is limited to term-time only.
From September 2017 the government is increasing this to 30 hours of free childcare a week for three and four-year-olds.
Contact your local council to find out what Sure Start Children Centres are in your area and what free classes and playgroups are available.
Alternative childcare arrangements
If you're struggling to keep up with payments, it could be worth looking at finding an alternative childcare arrangement that will save you money – even if it's only temporary.
Deciding if one form of childcare is cheaper than the other will depend on various factors, such as how many children you have, if you're paying by the hour or day, and how flexible your childcare provider is when it comes to payments.
It's times like this where accepting help from friends and family could save you a lot of money and stress when it comes to childcare and travel. By reducing nursery fees by just one day a week, you may be surprised by how much you will save on a monthly basis. You could also organise to share lifts to and from school to save on fuel costs.
Updated August 2016, next review due 2017.