Tax free childcare #1004

vahid-ahmadi · 2025-01-10T19:34:06Z

Overview

This PR implements the Tax-Free Childcare (TFC) scheme calculation in PolicyEngine UK. The scheme provides government contributions towards childcare costs for eligible families. (Documentation link)

Key Features

Annual contribution of up to £2,000 per standard child and £4,000 per disabled child
Government contributes £2 for every £8 parents deposit (20% support)
Income threshold of £100,000 per partner
Compatible with 15/30 hours of free childcare programs

Fixes #1002

MaxGhenis · 2025-01-11T02:15:51Z

@PavelMakarchuk could you please meet with @vahid-ahmadi on this? Probably easier than text review for getting the parameters and vectorization in for the first time.

PavelMakarchuk

Come initial comments but will meet to discuss in detail

PavelMakarchuk · 2025-01-11T15:15:02Z

...yengine_uk/variables/gov/hmrc/tax_free_childcare/conditions/childcare_age_child_condition.py

+        basic_age_condition = (age < 12)
+        age_under_17 = (age < 17)
+


We want to parameterize values such as "12" and "17" - in general we try to avoid hard coding any values that could be adjusted through a parameter reform.

PavelMakarchuk · 2025-01-11T15:15:56Z

...yengine_uk/variables/gov/hmrc/tax_free_childcare/conditions/childcare_age_child_condition.py

+        # Combine conditions
+        eligible = basic_age_condition | (age_under_17 & is_disabled)
+
+        return benunit.any(eligible)


since this is a person level variable we do not need to add the benunit.any condition

we want to return basic_age_condition | (age_under_17 & is_disabled)

PavelMakarchuk · 2025-01-11T15:16:48Z

policyengine_uk/variables/gov/hmrc/tax_free_childcare/tax-free-childcare-benefits.py

add a class

Use underscores when naming files instead of "-"

PavelMakarchuk · 2025-01-11T15:18:03Z

policyengine_uk/variables/gov/hmrc/tax_free_childcare/conditions/childcare_work_condition.py

+
+class childcare_work_condition(Variable):
+    value_type = bool
+    entity = Person


Similar question for each of the files - do we want to compute this for each person or for the entire Benefit Unit?

PavelMakarchuk · 2025-01-13T15:42:59Z

policyengine_uk/parameters/gov/hmrc/childcare_subsidies/tax_free_childcare/age_limits.yaml

lets split this file into to separate parameters:
make an age_limit folder
standard.yaml : value: 12
disability.yaml : value: 17

PavelMakarchuk · 2025-01-13T15:43:12Z

policyengine_uk/parameters/gov/hmrc/childcare_subsidies/tax_free_childcare/age_limits.yaml

+description: Age thresholds for tax-free childcare eligibility, including standard and disability-related limits.
+metadata:
+  unit: years
+  name: childcare_age_limits


Suggested change

name: childcare_age_limits

PavelMakarchuk · 2025-01-13T15:43:18Z

policyengine_uk/parameters/gov/hmrc/childcare_subsidies/tax_free_childcare/age_limits.yaml

@@ -0,0 +1,14 @@
+description: Age thresholds for tax-free childcare eligibility, including standard and disability-related limits.
+metadata:
+  unit: years


Suggested change

unit: years

unit: year

PavelMakarchuk · 2025-01-13T15:44:11Z

policyengine_uk/parameters/gov/hmrc/childcare_subsidies/tax_free_childcare/age_limits.yaml

+metadata:
+  unit: years
+  name: childcare_age_limits
+  label: Age limits for tax-free childcare eligibility


Suggested change

label: Age limits for tax-free childcare eligibility

label: Age limits for tax-free childcare eligibility

period: year

PavelMakarchuk · 2025-01-13T15:46:22Z

...e_uk/parameters/gov/hmrc/childcare_subsidies/tax_free_childcare/contribution_parameters.yaml

split this into three files:
folder: contributions

PavelMakarchuk · 2025-01-13T15:47:28Z

...yengine_uk/variables/gov/hmrc/tax_free_childcare/conditions/childcare_age_child_condition.py

+        gc = parameters(period).gov.dwp.pension_credit.guarantee_credit
+        standard_disability_benefits = gc.child.disability.eligibility
+        severe_disability_benefits = gc.child.disability.severe.eligibility


Suggested change

gc = parameters(period).gov.dwp.pension_credit.guarantee_credit

standard_disability_benefits = gc.child.disability.eligibility

severe_disability_benefits = gc.child.disability.severe.eligibility

gc = parameters(period).gov.dwp.pension_credit.guarantee_credit.child.disability

standard_disability_benefits = gc.eligibility

severe_disability_benefits = gc.severe.eligibility

PavelMakarchuk · 2025-01-13T15:47:46Z

...yengine_uk/variables/gov/hmrc/tax_free_childcare/conditions/childcare_age_child_condition.py

+        eligible = basic_age_condition | (
+            age_under_disability_limit & is_disabled
+        )
+
+        return eligible


Suggested change

eligible = basic_age_condition | (

age_under_disability_limit & is_disabled

)

return eligible

return basic_age_condition | (

age_under_disability_limit & is_disabled

)

PavelMakarchuk · 2025-01-13T15:49:16Z

policyengine_uk/variables/gov/hmrc/tax_free_childcare/conditions/childcare_income_condition.py

+            ],
+        )
+
+        yearly_eligible_income = total_income - investment_income


Suggested change

yearly_eligible_income = total_income - investment_income

yearly_eligible_income = max_(total_income - investment_income, 0)

If the value cant be negative

PavelMakarchuk · 2025-01-13T18:21:57Z

...e_uk/parameters/gov/hmrc/childcare_subsidies/tax_free_childcare/income_thresholds/adult.yaml

We can consolidate the adult and young adult files as follows:

brackets: - threshold: 2015-01-01: 0 amount: 2015-01-01: 0 - threshold: 2015-01-01: 18 amount: 2015-01-01: 1_788 - threshold: 2015-01-01: 21 amount: 2015-01-01: 2_379

In the .py file we can use it then as

age = person("age", period) file_name.calc(age)

PavelMakarchuk · 2025-01-13T18:24:30Z

policyengine_uk/variables/gov/hmrc/tax_free_childcare/tax_free_childcare_benefits.py

+        for child in benunit.members("is_child", period):
+            if is_eligible[child]:
+                if child("is_disabled", period):
+                    max_amount = p.disabled_child.values
+                else:
+                    max_amount = p.standard_child.values
+


Instead of if, else statements lets use where conditions

PavelMakarchuk · 2025-01-13T18:27:22Z

...uk/variables/gov/hmrc/tax_free_childcare/conditions/childcare_incompatibilities_condition.py

We then want to create unit tests to check the formulas

Example test:
in a new incompatibilities_childcare_eligible.yaml file:

- name: Ineligible due to all credits being 0 period: 2025 input: working_tax_credit: 0 child_tax_credit: 0 universal_credit: 0 output: incompatibilities_childcare_eligible: false - name: Eligible due to universal credit period: 2025 input: working_tax_credit: 0 child_tax_credit: 0 universal_credit: 1 output: incompatibilities_childcare_eligible: true

To run:
policyengine-core test ./policyengine_uk/tests/policy/baseline.....

…ine/policyengine-uk into tax-free-childcare-new

PavelMakarchuk · 2025-01-15T15:42:21Z

...s/gov/dwp/childcare_subsidies/tax_free_childcare/conditions/childcare_age_child_condition.py

What is the specific name of this program? Lets preface all variable class names with that

PavelMakarchuk · 2025-01-15T15:42:39Z

...s/gov/dwp/childcare_subsidies/tax_free_childcare/conditions/childcare_age_child_condition.py

+    label = "Child age eligibility requirements"
+    documentation = "Whether this person meets the age and disability requirements for eligibility"


Be program specific in label and description

PavelMakarchuk · 2025-01-15T15:44:37Z

...s/gov/dwp/childcare_subsidies/tax_free_childcare/conditions/childcare_age_child_condition.py

+from policyengine_uk.model_api import *
+
+
+class child_age_eligible(Variable):


Suggested change

class child_age_eligible(Variable):

class tax_free_childcare_child_age_eligible(Variable):

use in all variable classes and file names should match the class name

PavelMakarchuk · 2025-01-15T15:46:17Z

...e_uk/variables/gov/dwp/childcare_subsidies/tax_free_childcare/tax_free_childcare_benefits.py

+        ).astype(bool)
+
+        # Combine conditions using logical AND
+        is_eligible = np.logical_and.reduce(


lets make a separate tax_free_childcare_eligible.py

PavelMakarchuk · 2025-01-15T21:16:37Z

...p/childcare_subsidies/tax_free_childcare/conditions/childcare_incompatibilities_condition.py

Can we just make this for the BenefitUnit? Not sure if we need to examine each individual person here if all of the credits are computed for the benefit unit

similar question for all person level vars

As I understand, both parents can claim tax-free childcare. So, I think we need to check for each person here.

Could you add a statutory reference for this case here, just to confirm

Implement tax free childcare

adf96a0

vahid-ahmadi requested review from nikhilwoodruff and PavelMakarchuk January 10, 2025 20:08

PavelMakarchuk requested changes Jan 11, 2025

View reviewed changes

vahid-ahmadi added 10 commits January 13, 2025 13:27

Parameterize values

ee24d61

Reformatting to pass the tests

12d24be

Reformatting with black

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Reformatting with black

b3b1967

Format code with black

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Format code with black using 79-char line length

9952ed9

Fix YAML structure

d6b22e5

Fix age condition YAML file

b06a47c

Fix age condition YAML file

90eb823

Fix other YAML files

0c871a5

PavelMakarchuk requested changes Jan 13, 2025

View reviewed changes

vahid-ahmadi added 3 commits January 13, 2025 18:02

Edit parameterization

b28b5f8

Fix formatting

ff1f456

Edit age in YAML files

d3ad685

PavelMakarchuk requested changes Jan 13, 2025

View reviewed changes

vahid-ahmadi added 10 commits January 13, 2025 18:59

Replace if with where

5c6d359

Format with black

e0221f8

Edit for test passing

fc83a03

Edit format with black

4421154

Edit format of benefit py file

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Edit child as not being boolean

cf7f6e6

Change if to where

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Change disability definition

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Solve .values problem

37c7228

Edit .values error

af96f3a

vahid-ahmadi added 8 commits January 14, 2025 14:43

Edit vectorization problem

e96bc2e

Change folder from hmrc to dwp

153c2f6

Use is_disabled_for_benefits variable

c9fbd0c

Add .astype(bool) to fix error

a2f73d2

Fix bitwise AND operation error

a061877

Add .astype(bool) to conditions

a9ca8a7

Add unit tests

c7c6762

Reformat with black

59e1b78

vahid-ahmadi requested a review from PavelMakarchuk January 14, 2025 19:03

vahid-ahmadi added 6 commits January 15, 2025 14:35

Fix the folders

cebaace

Fix the folders

c1a5cf0

Merge branch 'tax-free-childcare-new' of https://github.com/policyeng…

49ec556

…ine/policyengine-uk into tax-free-childcare-new

Implement free childcare program

4a5cad5

Format with black

4432db2

Change tests

c7c1998

PavelMakarchuk requested changes Jan 15, 2025

View reviewed changes

Edit format based on Pavel's comments

789f676

	label: Age limits for tax-free childcare eligibility
	label: Age limits for tax-free childcare eligibility
	period: year

	yearly_eligible_income = total_income - investment_income
	yearly_eligible_income = max_(total_income - investment_income, 0)

		label = "Child age eligibility requirements"
		documentation = "Whether this person meets the age and disability requirements for eligibility"

		from policyengine_uk.model_api import *


		class child_age_eligible(Variable):

	class child_age_eligible(Variable):
	class tax_free_childcare_child_age_eligible(Variable):

Tax free childcare #1004

Are you sure you want to change the base?

Tax free childcare #1004

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vahid-ahmadi commented Jan 10, 2025 • edited Loading

Overview

Key Features

MaxGhenis commented Jan 11, 2025

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vahid-ahmadi commented Jan 10, 2025 •

edited

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