The complete guide to funded hours (15, 30 and the expanded offer)

Funded hours are one of the most rewarding — and most fiddly — parts of childminding income. Get them right and you have a stable base of weekly income from the council. Get them wrong and you're chasing claims, arguing with parents about top-ups, and missing payments.

The three offers in England (2026)

• 15 funded hours for all 3 and 4 year-olds (universal) — the term after they turn 3.
• 30 funded hours for working families with 3 and 4 year-olds whose parents both earn at least the equivalent of 16h/week at minimum wage, and under £100k each.
• 15 funded hours (expanded entitlement) for working families with children from 9 months to 2 years. From September 2025 this is 30 hours for working parents of children from 9 months up to school age.

What "funded" actually means

The funded entitlement is intended to be free at the point of use. You're paid a fixed hourly rate by the local authority — typically £6.00–£8.50 depending on area — which is almost always below your private rate. You can charge parents consumables (food, nappies, outings) and additional hours at your normal rate. You cannot make accessing the funded hours conditional on buying paid hours — but you can require parents to take a sensible minimum block (e.g. a full session).

How parents qualify

1. Parents apply on childcarechoices.gov.uk and receive an 11-digit eligibility code.
2. They give you the code, their child's date of birth and their National Insurance number.
3. You enter these into your local authority's portal (or your funding tool) to confirm eligibility.
4. Parents must reconfirm every 3 months. If they miss the reconfirmation window, the funding lapses and you don't get paid for that term.

The claims cycle

Most local authorities run on a termly cycle with three estimated payments and one actual:

• Headcount day: a single day in each term where you confirm which children attended. This determines termly funding.
• Estimate payment: typically paid at the start of term, based on prior headcount.
• Adjustment payment: at term end, reconciling actuals against estimates.

How to handle funded hours on invoices

This is where most childminders lose money. The clearest format is:

1. List total hours of care delivered.
2. Deduct funded hours (e.g. 30h × 38 weeks ÷ 52 = 21.9h per week stretched).
3. Charge additional hours at your normal rate.
4. Add consumables as a separate line (food, nappies, trips).
5. State clearly: "This invoice does not charge for the funded entitlement."

Stretched vs term-time funding

Funded hours are allocated as 38 weeks × the entitlement (e.g. 30 × 38 = 1,140 hours a year). You can stretch these over 51 or 52 weeks if it suits the family — useful if a child attends year-round. The total amount of funding stays the same; the per-week deduction is smaller.

Common mistakes that cost you money

• Charging parents for funded hours — even unintentionally as a "rate". This breaches the statutory guidance and risks repayment.
• Forgetting consumables charges. Food, outings and nappies are allowable extras — list them.
• Missing parent reconfirmations. Send a reminder 2 weeks before reconfirmation is due. Many parents forget.
• Inconsistent invoicing across funded and private children, which makes your annual income hard to reconcile.
• Not claiming for new children quickly enough. Funding can sometimes only be backdated within the current term.

The paperwork inspectors and the LA expect

• A signed Parent Declaration Form for each funded child each term
• Attendance records showing actual hours delivered
• Evidence the funded entitlement was offered free of charge
• A clear written policy on funded hours and additional charges

What about Tax-Free Childcare?

Tax-Free Childcare is separate. Parents pay you from their TFC account; the government tops their account up by 20%. From your point of view it's just income — they pay you, you record it, you get taxed on it. It can be combined with funded hours.