Critics want ministers to fix the £100,000 childcare cliff edge that can wipe out support.
Why it matters: The threshold affects whether parents keep subsidised childcare as they work more or earn more. That makes it a live issue for labor supply, family finances and retention, especially for higher earners.
- England's working-parent childcare entitlement requires each parent to expect to earn at least 16 hours a week at National Minimum Wage and to have adjusted net income below £100,000.
- The government said on 11 March 2025 the threshold was chosen to align with income-tax thresholds and had no current plans to change it.
- A Commons Library briefing in June 2025 said the Institute for Fiscal Studies warned the childcare expansion widened the scope and size of the £100,000 cliff edge.
- GOV.UK says families lose the working-parent entitlement if either parent's expected adjusted net income exceeds £100,000.
England's working-parent childcare entitlement offers up to 30 hours a week of term-time childcare for eligible parents of children from 9 months to school age, on top of the universal 15 hours for 3- and 4-year-olds. But eligibility drops away if either parent has expected adjusted net income above £100,000, creating the sharp cut-off critics call a cliff edge.
The Department for Education said in a March 2025 parliamentary answer that the threshold was set to line up with income-tax thresholds and remain easy for parents to understand. It also said there were no current plans to change it. A January 2026 answer said the entitlement is meant to help parents return to work or work more hours, and that the minimum income threshold rises with National Minimum Wage increases each financial year. Parliamentary answer | Parliamentary answer
A June 2025 Commons Library briefing said the Institute for Fiscal Studies warned the childcare expansion significantly widened the cliff edge because families can lose both 30 hours and tax-free childcare at once. GOV.UK's eligibility checker makes the rule explicit: if either parent's expected adjusted net income exceeds £100,000, the family loses the working-parent entitlement. Commons Library briefing | GOV.UK eligibility checker
Government survey data published in 2026 suggests the policy does not change hours for many higher earners: 43% of respondents earning more than £100,000 said the childcare entitlements were not very or not at all influential in changing their working hours. That points to a mixed picture on whether the threshold is a major work disincentive across the board. Childcare Experiences Survey
By the numbers
- £100,000 - adjusted net income threshold above which families lose the working-parent entitlement.
- 16 hours - minimum weekly work requirement at National Minimum Wage equivalent for each parent.
- 43% - share of higher earners in a 2026 government survey who said the entitlements were not very or not at all influential in changing working hours.
Yes, but: Government survey evidence suggests many higher earners do not change hours because of the scheme, even though the cliff edge remains a concern for critics.