A pay rise, bonus or RSU vest can change childcare eligibility. Start with each parent's expected adjusted net income for the tax year, including other taxable income and the relevant pension and Gift Aid adjustments. A salary figure alone does not settle it.
Which support has the £100k limit?
- Tax-Free Childcare: the government adds £2 for every £8 you pay in, subject to quarterly limits. If either parent expects adjusted net income over £100,000, the family does not qualify.
- Free Childcare for Working Parents in England: eligible children aged nine months to four years can get 30 hours a week for 38 weeks. The same upper-income test applies, alongside work and other conditions.
The universal 15 hours do not disappear
All three- and four-year-olds in England can get 570 free hours a year, usually 15 hours a week for 38 weeks, regardless of parental income. It starts from the term after the third birthday and stops when the child starts reception or reaches compulsory school age, if later. A family losing working-parent eligibility can therefore retain these universal hours. The working-parent 30 hours include the universal 15, rather than adding another 30 on top.
Eligibility is not the same as an immediate bill change
The income limit is a gate, not a gradual taper. But do not assume a bonus instantly removes every funded hour or that a pension payment instantly restores a nursery place. You must reconfirm eligibility every three months. Application dates, term starts, the provider's arrangements and any grace period matter. Ask the provider or local authority for the date your funded hours would change.
Use the bill you would actually pay
Get two written quotes from your provider: with confirmed support and after the support at risk ends. Keep attendance, meals, consumables and extra hours consistent. Government funding paid to providers is not automatically the hourly price a parent avoids. Then calculate any Tax-Free Childcare top-up on eligible payments, subject to its quarterly cap.
The nursery-budget guide separates hours, extras and account top-ups. The salary versus adjusted net income guide explains what income to check.
Can pension contributions help?
Some pension contributions and Gift Aid donations reduce adjusted net income. Check the gross amount, tax year, pension allowance and access restrictions before committing. Getting below the income ceiling does not replace the other eligibility conditions or the need to apply and reconfirm. This is general education, not personal financial or tax advice.