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Document How is Childcare Allowance calculated?

Childcare Allowance is calculated by working out your possible entitlement based on the amount you claim and deducting any residual income (net income minus allowable expenses) if applicable from this.

Residual income is firstly applied to any Dependants Allowance entitlement available to you. If your Dependants Allowance entitlement is reduced to nil, the remaining residual income is then deducted from your Parent Learning Allowance entitlement. If there is still a remaining residual income after this, your Childcare Allowance will be reduced accordingly.

Childcare Allowance can pay up to 85% of your actual childcare costs up to a maximum amount.

If your academic year began on or after 1 September 2015, the maximum payable rates have increased to £128.78 per week for one child and £191.45 per week for two or more children.

If your academic year began on or after 1 September 2014 but before 31 August 2015, the maximum payable rates are £127.50 per week for one child and £189.55 per week for two or more children.

Example

You make an application for Childcare for an academic year starting on or after 1 September 2014 and claim for one child in registered childcare costing £200.00 per week for 40 weeks.

85% of £200.00 is £170.00

This is over our maximum so we will calculate your possible entitlement at £128.78 per week.

£128.78 multiplied by 40 weeks equals £5,151.20 possible entitlement for the academic year.

If there is any remaining residual income, your possible entitlement will be reduced by the remaining amount.

If you have no residual income, you could be awarded the full 85% (or maximum rate) for the amount of childcare you claim.

Please remember to keep your receipts for all childcare costs you pay.
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