11.A person will be eligible to receive Government support (referred to as a ‘top-up payment’) if:
they meet the eligibility conditions;
they provide information to demonstrate their eligibility in a declaration to HMRC, and HMRC agrees, based on that information, that they are eligible;
they have a child who qualifies for support;
they have opened a childcare account in accordance with the scheme; and
they, or another person, pay money into the childcare account.
12.The eligibility conditions which must be met are that:
the person is at least 16 years of age;
the person is responsible for the child (whether or not they are the child’s biological or legal parent);
the person is in the UK;
the person (and their partner if they have one) is in paid work, whether as an employee or as a self-employed person, and earns more than a minimum income from that work (it is intended that this will be set in regulations at the amount the individual would earn by working 8 hours a week at the national minimum wage);
the person’s income (and that of their partner if they have one) does not exceed a certain level (it is intended that this will be set in regulations at the amount which would make the individual liable to pay income tax at the additional rate, or £150,000 per year); and
the person (and their partner if they have one) is not claiming universal credit, and is not in receipt of other publicly-funded support for their childcare costs. Any tax credits award will automatically cease when they join the scheme.
13.The declaration which someone who wishes to receive support must make to HMRC is referred to in the Act as a declaration of eligibility. A person will be required to make a declaration when they first apply to open a childcare account and periodically thereafter when they wish to reconfirm their entitlement to support.
14.Once a person is entitled to support they will remain entitled for a period of time, referred to as an ‘entitlement period’, which will generally last for three months. This will be the case even if their circumstances change during an entitlement period so that they cease to meet some or all of the eligibility rules.
15.This means that a person will not be required to make any further declaration during the entitlement period. However, in order to qualify for further top-up payments in the next entitlement period, they will need to make a further declaration of eligibility before the start of that period.
16.The account into which a person pays money and into which the Government will make top-up payments is referred to in the Act as a childcare account. The Act contains rules which apply to childcare accounts and specifically what types of payment can be made into and out of such accounts.
17.The Act also contains rules which are designed to deal with error and fraud. These include new powers to enable HMRC to request documents and information in order to verify declarations of eligibility which an individual has made in order to receive Government top-up payments. Further powers also allow HMRC to recover top-up payments which were claimed by someone who was not entitled to them and to impose penalties for dishonest or careless behaviour.