Government's new childcare system faces teething problems

The new website that parents need to use to register for two key childcare schemes has been riddled with problems, leaving thousands of parents out of pocket.

The government's "Childcare Choices" website, launched in April, allows parents to apply for assistance with childcare costs (it's mainly for parents in England, with similar schemes available elsewhere in the UK). The site allows you to apply for between 15 and 30 hours of free childcare, among other benefits, and you can also sign up for the government's tax-free childcare top-up system (see belowfor more on how this works). However, HM Revenue & Customers (HMRC) has received almost 1,000 complaints since the website was launched, according to Money Saving Expert. Problems include reports of the government top-up not being paid, parents being locked out of accounts and people spending months waiting for a response to their requests for help.

HMRC has now launched a compensation scheme for parents left out of pocket by difficulties with the site. Parents may be able to claim a one-off pay-out if they weren't able to complete their application for tax-free childcare, couldn't log into their account or didn't receive a decision 20 days after applying. To apply for compensation, write to Childcare Service, HMRC, BX9 1GR, giving your name, address, National Insurance number, your bank details, copies of receipts for payments for childcare and a description of the problems you've faced. If you still haven't managed to register for your free nursery care or received your government top-ups, HMRC are now issuing these offline you can call the Childcare Service helpline on 0300 123 4097.

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How to benefit from the tax-free childcare system

The government's tax-free childcare system works like an online savings account. You transfer in your cash, and the top-up should be paid that same day (although that is one of the delays people are currently complaining about). The government will contribute an extra £2 for every £8 a parent pays into the online account, up to a maximum of £2,000 per child. Once your childcare costs exceed £10,000, the government top-ups will cease.

To qualify for the scheme, parents must work and each earn at least £120 per week (on average) and not more than £100,000 each per year. And unlike the government's last childcare assistance scheme vouchers this one is open to the self-employed too. You don't have to pay in the same amount each month, but there is a quarterly limit on government top-ups of £500. So, if you know your childcare costs will be higher over the summer holidays, try to spread out payments so you don't fall foul of the limit. Parents of disabled children can receive up to £4,000 per child up to £1,000 every three months.

You can use this scheme alongside the government's 15 and 30 free hours of childcare. However, it's important to be aware that every three months, you need to reconfirm your eligibility for the scheme by ticking a box online. You also need to ensure that your childcare provider is signed up to the tax-free childcare system. At present, the scheme is limited to parents with children under four on 31 August 2017, and disabled children under 17. However, it will gradually be rolled out this year to parents of children under 12. You can sign up at ChildcareChoices.gov.uk for email alerts to tell you when you can apply.

In the news this week...

We're all bored of hearing about mis-sold payment protection insurance (PPI), says Aimee Donnellan in The Times. But it may pay to take notice of the latest marketing drive, not least because a 2014 Supreme Court ruling over the non-disclosure of commission on PPI policies (typically 67%) has paved the way for the resubmission of claims that were previously rejected. More than 64 million PPI policies were sold to around 30 million people between 1990 and 2010, supposedly offering peace of mind that your mortgage or loan would be repaid in the event of unemployment or illness (see page 3). However, the Financial Conduct Authority decided that many customers did not need or understand the policies, leading to around 12 million successful compensation claims. If you want to make or resubmit a claim, avoid claims chasers, who often pocket around 40% of any successful claim. Instead, find as much pre-2010 bank paperwork as possible and look for terms such as "protection", "insurance" or "cover". If you think you have been mis-sold PPI, go to FCA.org.uk to launch a claim. The deadline for lodging a complaint is August 2019.

Motorists are being "fleeced" by apps that "claim to make parking eruthasier by using a mobile phone", says Toby Walne in the Mail on Sunday. It may save the inconvenience of queuing or finding change, but an "array of sneaky extra charges" including text message fees, can add a third to your car parking fee. In addition, if you key in the incorrect number plate, you may still get "clobbered" by a parking fine. There are upsides, though. JustPark, for instance, may levy a "hefty" service charge but it helps you to find private spaces rented out by homeowners, and allows you to reserve spots in advance.

Identity theft has "hit an all-time high", with almost 500 people falling victim to fraudsters every day in the UK, reports the Financial Times. More than 80% of thefts occurred online, and young people are most at risk. So be vigilant when using public WiFi, take care with privacy settings and monitor your credit rating. A problem with your rating could reflect fraudulent activity.