Losing funded childcare at £100,000

In England two of the biggest kinds of childcare help have a hard income limit. If either parent expects their adjusted net income to be over £100,000 in the tax year, the family can't get them. There's no taper: £1 over loses all of it.

What stops at £100,000

• Working-parent funded hours. Up to 30 hours a week, 38 weeks a year, for children from 9 months old until they start school. That's 1,140 hours a year. Depending on your nursery's hourly rate it can be worth well over £10,000 a year for each child.
• Tax-Free Childcare. The government adds £2 for every £8 you pay into the account: 20% of your childcare costs, up to £2,000 a year for each child under 12 (£4,000 for a disabled child, until 17).

What you keep

• The universal 15 hours for 3 and 4 year olds, whatever you earn.
• Child Benefit, although the High Income Child Benefit Charge takes it back once one parent is over £60,000, all of it from £80,000.

The other conditions

Each parent also needs to expect to earn at least the equivalent of 16 hours a week at the National Minimum or Living Wage, on average, over the next 3 months. You apply through a childcare account and reconfirm every 3 months. Funded hours start the term after you get a valid code, and terms start on 1 January, 1 April and 1 September.

Staying eligible

The test is your expected adjusted net income for the whole tax year, so a pay rise or bonus can tip you over. Extra pension contributions bring it back down. Hundred Line works out how much each parent needs to contribute in each tax year, and whether the childcare kept is worth more than the take-home pay given up.

Sources

• Check if you can get Tax-Free Childcare (GOV.UK)
• 30 hours free childcare: eligibility (GOV.UK)
• Childcare Choices

Checked 31 October 2026 for England. This guide is general information, not financial advice.