Child Care Changes
Summary
Changes to the child care provisions for Working Tax Credit were announced in the Budget 2004. Changes relating to child care costs for a new baby have been effective since 6 April 2004. Changes extending the categories of eligible child care providers took effect on 1 June 2004.

Detail
Changes effective from 6 April 2004
From 6 April 2004, people on maternity/paternity/adoption leave who meet the qualifying conditions for Working Tax Credit can claim the child care element to help with the costs of eligible child care for their new baby/child as well as for other children in their family. For claims for the year 2003/04, claimants could not claim for the costs of child care for their new child, for whom they were taking leave, but could claim the child care element for the costs of child care for any other child in the family.

From 6 April 2004, a first-time parent can claim Working Tax Credit including the child care element from birth/adoption of their child provided he/she usually worked at least 16 hours a week before the maternity/paternity/adoption leave began. For claims for the year 2003/04, a first-time parent could not claim Working Tax Credit, including the child care element, unless he/she was over 25 and usually worked at least 30 hours a week before the leave began.

Changes effective from 1 June 2004
From 1 June 2003, the list of eligible child care providers has been extended to include care provided by foster carers who are approved by a local authority or a fostering agency (but not if the care is provided by the foster carer for his/her foster child). The child care being provided by foster carers in this way will be care of the last resort where parents have difficulties using traditional child care like childminders and nurseries.

From 1 June 2004, the list of eligible child care providers was extended to include school breakfast clubs. Please note that this change only applies to care being provided in England, Wales and Northern Ireland. Child care run by schools in Scotland is regulated up to the age of 1 6 and already qualifies for the child care support provided by the child care element of Working Tax Credit.