How does the 30 hours free childcare eligibility test work?

Full answer

The 30 hours free childcare offer for working parents in England has two separate income tests that must both be satisfied, and it is easy to fall foul of either one even with a reasonable household income. **The minimum income floor (lower limit)** Each parent must expect to earn at least the equivalent of 16 hours a week at the National Living Wage or National Minimum Wage over the coming three months, which works out to a few thousand pounds over that period depending on age band -- this test exists to ensure the offer targets working parents, rather than those who are not working at all. Self-employed parents newly starting out benefit from a "start-up period" allowance that relaxes this test for their first year of trading. **The maximum income ceiling (upper limit)** Separately, if EITHER parent in a couple has an individual adjusted net income of £100,000 or more in the current tax year, the household loses eligibility for the free hours entirely -- this is assessed per individual, not combined household income, so a couple where one parent earns £150,000 and the other earns £20,000 does NOT qualify, even though a couple where both parents earn £95,000 each (a combined £190,000, much higher) DOES qualify. **Why the per-parent test creates unfairness** Because the £100,000 ceiling is tested per individual rather than combined, single high earners with a much lower-earning or non-working partner lose the benefit entirely, while two-earner couples with a substantially higher joint income can retain it -- this quirk has attracted criticism as a "cliff edge" and is a common source of confusion when parents receive a P11D benefit or one-off bonus that unexpectedly tips them over £100,000 for the year. **Worked example** A couple has one parent working full-time at a salary of £45,000 and the other running a small self-employed business earning £12,000 a year, both above the minimum income floor and both well under £100,000 individually -- they qualify for the full 30 hours (during term time, in addition to the 15 hours available from 9 months for all working families, and the wraparound childcare offer). If the higher earner then receives a £60,000 bonus taking their adjusted net income for the year to £105,000, they would lose eligibility, since the test is based on the tax year in which the bonus falls. **Reconfirming eligibility** Parents must reconfirm their eligibility every three months through their childcare account, and HMRC checks the income declarations against actual tax records -- if a bonus or pay rise takes someone over the £100,000 threshold partway through a checking period, they typically retain the code for the remainder of that period (a "grace period") before losing it at the next reconfirmation if income remains too high. **Practical tip** If you expect to be close to the £100,000 ceiling, consider pension salary sacrifice, since increasing pension contributions reduces adjusted net income and can preserve both the childcare offer and Personal Allowance, potentially saving far more than the extra pension contribution costs.

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