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Funded hours for eligible 2 year olds

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If you are a working parent with a 2 year old the Childcare Choices website offers a comparison guide for ways to reduce childcare costs.

15 Funded hours for eligible 2 year olds

Children in families with a low income or in receipt of certain benefits are entitled to 15 funded hours of childcare or early years education

  • The funded hours are up to 570 hours a year.
  • This is 15 hours over 38 weeks or fewer hours per week for more weeks in the year.
  • This can be taken at registered settings or childcare providers or cross more than one setting.

Apply for Education Welfare Benefits



Some two year olds are entitled to funded early learning and childcare. The eligibility starts the school term after the child’s second birthday. Although not all two year olds are entitled to a funded place, all children become eligible for funded childcare and early learning places from the school term after their third birthday. Funded early learning and childcare for 3 and 4 year olds.


Eligibility criteria for two years old funded early learning and childcare 
Children born in the period

Become entitled for funding at the start of the funding period or following

Funding period

1 January - 31 March 1 April Summer
1 April - 31 August 1 September Autumn
1 September - 31 December 1 January Spring

Either parent must be in receipt of one of the following benefits:

  • Working Tax Credit provided your annual income (as assessed by HM Revenue & Customs) does not exceed £16,190
  • Income Support
  • Income Based Job Seekers Allowance
  • Income-related Employment and Support Allowance
  • Support under part VI of the Immigration & Asylum Act 1999
  • Child Tax Credit provided your annual income (as assessed by HM Revenue & Customs) does not exceed £16,190
  • Guarantee element of State Pension Credit
  • Universal Credit (provided you have an annual net earned income of no more than £15,400, as assessed by earnings from up to three of your most recent assessment periods)

Or, the child:

  • has been adopted from local authority care
  • has been looked after by a local authority
  • has left care through a special guardianship or child arrangements order
  • is in receipt of Disability Living Allowance
  • has an Education, Health and Care (EHC) Plan

If you have received a letter, you will need to complete the online application form to check your eligibility. The letter is not proof of entitlement as your circumstances can change. You do not need the letter to make an application - anyone meeting eligibility can apply.

Apply for funded childcare for 2 year olds

If you qualify, you will receive an authorisation code, which you need to give to the early learning and childcare provider of your choice and discuss taking up a place with them. The authorisation code can be used at more than one provider and is valid until the funding period following your child's third birthday.

If you are eligible, your child is entitled to a maximum of 570 funded hours in the 12 month period. Please refer to the table above for the eligible dates of birth.

Frequently asked questions

What is the entitlement?

The hours and sessions which are available for funded childcare will depend on the individual childcare setting and will need to be agreed in advance. There should not be any additional costs attached to claiming the funded hours, such as top up fees or uniform charges.

What are the benefits for my child?

Children benefit from early learning, we know this from research. Good quality early learning:

  • helps your child to be happy, confident, sociable and curious
  • gives opportunities to be active and learn through fun and play, indoors and outdoors
  • offers many activities including creative and messy play
  • helps them to become effective learners and ready for school
  • has a long term impact on their development

How do I find a place?

You can find a list of childcare providers near where you live who have been approved to offer funded places for 2 year olds on the Childcare Directory. You can then contact the childcare provider directly to see if they have any vacancies. It is best to do this as soon as possible, because some childcare settings have long waiting lists. Visit the Childcare Information page for more information.

  • If your child already attends childcare, please ask your childcare provider if they offer funded places for 2 year olds.
  • If you need further support you can visit your nearest Child and Family Centre.

If Peterborough City Council is your local authority, you can apply for funded childcare on their website.

Will it affect my tax credits?

Childcare costs are included in the calculations made by HMRC to ensure that you receive the right amount of credit that you are entitled to. If you already pay for childcare and claim child tax credit to cover the cost, you must notify HMRC as soon as possible if taking up a funded place reduces the cost of your childcare by £10 or more a week.

You do not need to notify HMRC if your cost does not change, for example if you use the funded childcare to increase the number of hours your child attends. You will always be better off taking up a funded place as tax credits only contribute to a part of the full cost of childcare and not all of it.

There is HMRC guidance for parents or carers who may be having difficulty claiming childcare support through tax credits or childcare vouchers if their childcare provider is a school. 

Contact the Education Welfare Benefits team

You can contact the Council’s Education Welfare Benefits Team for information about applications for free school meals, or benefits which support children financially while at school or college.

Education Welfare Benefits Team
Box Number: ALC2606
New Shire Hall
Emery Crescent
Enterprise Campus
Alconbury Weald
PE28 4YE

Tel: 01223 703 200

Early years funding is a national scheme administered by local authorities in their areas. To find out more about the legal framework and principles go to Early Years Funding Code of Practice for Local Authorities.