How will redundancy payout affect our eligibility for 30 hours childcare?

[Allswellthatendswelll]

We have been purposefully under the 100k cut off for DHs salary for a while so we get the 30 hours. However he is just about to recieve a large redundancy payment so this will push us right over for the year. He is going into another job almost straight away. I'm assuming this will mean we lose the 30 hours- it's too much money to stash in a pension- but does anyone know how this works with when we lose them and if we will need to pay any back? I need to reconfirm in October but the payment may not be until November. TIA

Hi - I have recently been through similar so I can share from experience.

Firstly, you will not have to pay anything back as they don’t apply any change in circumstances retrospectively but it will impact your entitlement for the January - March term. You mention reconfirming in October and that shouldn’t be the case for free hours. Typically you won’t need to provide a new code to nursery until January so this term (Sept-dec) should be ok to continue as 30 free hours.

Then you will have your entitlement reduced to 15 hours for the rest of the tax year. I think the way it works it will also impact the summer term (March - Sept) as you’ll still be in this tax year but make sure you look carefully at this when it comes around. Then from September, if your DH is back to earning below £100k you will be able to reconfirm the hours entitlement.

The reconfirming you are talking about - is that in your tax free gov child care account? If so, that should only affect tax free childcare element of the support. The partial way around this is to transfer the maximum you can ahead of time to get whatever top up you can before they remove it (they won’t take away the 20% as again, they don’t apply it retrospectively).

Just a few points to clarify.

Funding codes do need to be reconfirmed every 3 months so if October is your deadline then you need to conform then. The code stays the same but it gets a new expiry date on the funding portal.

Also 15 hours funding is only available if the child is aged 3 or 4 for early education. Babies/ 2 year old will drop to zero funded hours.

Ah Yes, to clarify my experience related to a child over three.

I definitely kept my summer term free hours after redundancy- I got made redundant late April and paid out in May - by then I’d already confirmed the summer code and so received free hours until 31 August and my child has now left. I only lost TFC.