England's two main working-parent childcare schemes, Tax-Free Childcare and funded hours, both quietly share the same eligibility ceiling as the personal allowance taper: £100,000 of adjusted net income. But where the taper fades out gradually, childcare support does not.
The two schemes, in brief
- Tax-Free Childcare: for every £8 you pay into a Tax-Free Childcare account, the government adds £2, up to £2,000 of top-up per child per year (£4,000 for a disabled child).
- Funded hours: working parents of children aged 9 months to 4 years can get up to 30 hours a week of funded childcare, for 38 weeks of the year, at a national average rate set by the Department for Education.
Why £100,000 removes both at once
Both schemes use the same adjusted net income test, and both are eligibility gates rather than means-tested tapers. A household where both parents earn comfortably under £100,000 keeps full access. The moment either parent's ANI exceeds £100,000, even by a small bonus or an RSU vest, that parent's family loses Tax-Free Childcare and funded hours entirely for the rest of that tax year, not a reduced amount.
What it is actually worth
For a family with one child in nursery using the funded hours entitlement plus Tax-Free Childcare on top, the combined value commonly runs into several thousand pounds a year; with two children in the funded-hours age range the household figure can be considerably higher, since the loss applies per child.
Getting back under the line
Because the ANI test is identical to the personal allowance taper's, the same fix works for both: a pension contribution or Gift Aid donation that brings the affected parent's ANI back to £100,000 or below restores the personal allowance and the childcare support together, in the same calculation.