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Pay childcare tax credits direct to the carer

Comment 6th July 2010

When times are financially tough, a parent may borrow from their Thursday tax credit payment to cover other household costs. Promising they will catch up later in the month. Inevitably, when its time to pay the Childminder, After School / Breakfast Club or Nursery, they don't have the  money and fall into arrears.

There is also the temptation to claim for higher fees than actually paid or claim and then never use the carer. 

Worryingly carers very rarely are asked for proof that children are attending the setting for which their parents are claiming. Having said this childcarers do not have the time to fill in lengthy forms for HMRC,  One possible solution, that seems sensible, is to follow the NEG method with monitoring 3 times per year (not too paperwork heavy!) and make payments direct to the carer.

Why does this matter?

The added benefit of promoting sustainability for a sector which is struggling, making good use of the Local Authority money that has already been invested into this sector.

As a childcare provider employing 15 people across 4 settings; if something is not done these valuable settings risk closing due to financial pressures. Losing 100 After School places, 15 staff out of work and the failure of a 10 year SME.


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