Tax free childcare

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

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+description: Age thresholds for tax-free childcare eligibility, including standard and disability-related limits.
+metadata:
+  unit: years
+  name: childcare_age_limits
+  label: Age limits for tax-free childcare eligibility
+  reference:
+    - title: Childcare Act
+      href: https://www.legislation.gov.uk/ukdsi/2015/9780111127063
+    - title: Tax-Free Childcare Guidance
+      href: https://www.gov.uk/tax-free-childcare?step-by-step-nav=d78aeaf6-1747-4d72-9619-f16efb4dd89d
+values:
+  2025-01-01:
+    - standard_age_limit: 12
+    - disability_age_limit: 17

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

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+description: Parameters for tax-free childcare government contribution calculations.
+metadata:
+  unit: currency-GBP
+  name: contribution_parameters
+  label: Tax-free childcare contribution parameters
+  reference:
+    - title: Childcare Payments Act
+      href: https://www.legislation.gov.uk/ukdsi/2015/9780111127063
+    - title: Tax-Free Childcare Guidance
+      href: https://www.gov.uk/tax-free-childcare?step-by-step-nav=d78aeaf6-1747-4d72-9619-f16efb4dd89d
+
+standard_child:
+  yearly_max:
+    values:
+      2025-01-01: 2000
+    metadata:
+      unit: currency-GBP
+
+disabled_child:
+  yearly_max:
+    values:
+      2025-01-01: 4000
+    metadata:
+      unit: currency-GBP
+
+government_contribution_ratio:
+  values:
+    2025-01-01: 0.25  # 2/8 expressed as decimal
+  metadata:
+    unit: /1

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

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+description: Income thresholds for tax-free childcare eligibility by age group.
+metadata:
+  unit: currency-GBP
+  name: income_thresholds
+  label: Income thresholds for tax-free childcare eligibility
+  reference:
+    - title: Childcare Payments Act 2014
+      href: https://www.legislation.gov.uk/ukdsi/2015/9780111127063
+    - title: Tax-Free Childcare Guidance
+      href: https://www.gov.uk/tax-free-childcare?step-by-step-nav=d78aeaf6-1747-4d72-9619-f16efb4dd89d
+
+adult:
+  quarterly_income:
+    values:
+      2025-01-01: 2379
+    metadata:
+      unit: currency-GBP
+  min_age:
+    values:
+      2025-01-01: 21
+    metadata:
+      unit: years
+
+young_adult:
+  quarterly_income:
+    values:
+      2025-01-01: 1788
+    metadata:
+      unit: currency-GBP
+  min_age:
+    values:
+      2025-01-01: 18
+    metadata:
+      unit: years
+  max_age:
+    values:
+      2025-01-01: 20
+    metadata:
+      unit: years
+
+youth:
+  quarterly_income:
+    values:
+      2025-01-01: 1331
+    metadata:
+      unit: currency-GBP

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

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+from policyengine_uk.model_api import *
+
+
+class child_age_eligible(Variable):
+    value_type = bool
+    entity = Person
+    label = "Child age eligibility requirements"
+    documentation = "Whether this person meets the age and disability requirements for eligibility"
+    definition_period = YEAR
+
+    def formula(person, period, parameters):
+        """
+        Calculate age eligibility based on age and disability conditions.
+
+        Returns:
+            bool: True if eligible (under standard age limit, or under disability age limit with disability), False otherwise
+        """
+        # Get person's characteristics
+        age = person("age", period)
+
+        # Get age thresholds from parameters
+        age_limits = parameters(
+            period
+        ).gov.hmrc.childcare_subsidies.tax_free_childcare.age_limits
+        standard_age_limit = age_limits.standard_age_limit
+        disability_age_limit = age_limits.disability_age_limit
+
+        # Check disability conditions
+        gc = parameters(period).gov.dwp.pension_credit.guarantee_credit
+        standard_disability_benefits = gc.child.disability.eligibility
+        severe_disability_benefits = gc.child.disability.severe.eligibility
+
+        is_disabled = (
+            add(person, period, standard_disability_benefits)
+            | add(person, period, severe_disability_benefits)
+        ) > 0
+
+        # Check age conditions using parameterized values
+        basic_age_condition = age < standard_age_limit
+        age_under_disability_limit = age < disability_age_limit
+
+        # Combine conditions
+        eligible = basic_age_condition | (
+            age_under_disability_limit & is_disabled
+        )
+
+        return eligible

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

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+from policyengine_uk.model_api import *
+
+
+class meets_income_requirements(Variable):
+    value_type = bool
+    entity = Person
+    label = "Income requirements and calculations"
+    documentation = "Whether this person meets the income requirements for tax-free childcare based on age and income thresholds"
+    definition_period = YEAR
+
+    def formula(person, period, parameters):
+        """
+        Calculate if a person meets income requirements based on their age and income.
+
+        Returns:
+            bool: True if they meet the income conditions for their age group
+        """
+        # Get person's characteristics
+        age = person("age", period)
+
+        # Calculate eligible income
+        total_income = person("total_income", period)
+        # Extract investment incomes to subtract
+        investment_income = add(
+            person,
+            period,
+            [
+                "private_pension_income",
+                "savings_interest_income",
+                "dividend_income",
+                "property_income",
+            ],
+        )
+
+        yearly_eligible_income = total_income - investment_income
+
+        # Get income thresholds from parameters
+        income_limits = parameters(
+            period
+        ).gov.hmrc.childcare_subsidies.tax_free_childcare.income_thresholds
+        quarterly_income = yearly_eligible_income / 4
+
+        # Age >= 21
+        meets_adult_condition = (age >= income_limits.adult.min_age) & (
+            quarterly_income >= income_limits.adult.quarterly_income
+        )
+
+        # Age 18-20
+        meets_young_adult_condition = (
+            (age >= income_limits.young_adult.min_age)
+            & (age <= income_limits.young_adult.max_age)
+            & (quarterly_income >= income_limits.young_adult.quarterly_income)
+        )
+
+        # Age < 18
+        meets_youth_condition = (age < income_limits.young_adult.min_age) & (
+            quarterly_income >= income_limits.youth.quarterly_income
+        )
+
+        # Combine all conditions
+        return (
+            meets_adult_condition
+            | meets_young_adult_condition
+            | meets_youth_condition
+        )

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

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+from policyengine_uk.model_api import *
+
+
+class incompatibilities_childcare_eligible(Variable):
+    value_type = bool
+    entity = Person
+    label = "Tax-Free Childcare Exclusions"
+    documentation = "Whether the person's benefit unit meets the incompatibility conditions for tax-free childcare (not receiving WTC, CTC, or UC)"
+    definition_period = YEAR
+
+    def formula(person, period, parameters):
+        """
+        Calculate eligibility based on incompatible benefits.
+
+        Returns:
+            bool: True if eligible (no incompatible benefits received), False if receiving any incompatible benefits
+        """
+        # Get the benefit unit the person belongs to
+        benunit = person.benunit
+
+        # Check if receiving any of the mutually exclusive benefits
+        has_wtc = benunit("working_tax_credit", period) > 0
+        has_ctc = benunit("child_tax_credit", period) > 0
+        has_uc = benunit("universal_credit", period) > 0
+
+        # Returns True when person's benefit unit does NOT receive any of these benefits
+        return ~(has_wtc | has_ctc | has_uc)

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

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+from policyengine_uk.model_api import *
+
+
+class childcare_work_condition(Variable):
+    value_type = bool
+    entity = Person
+    label = "Work conditions for tax-free childcare"
+    documentation = "Whether the person/couple meets work requirements for tax-free childcare"
+    definition_period = YEAR
+
+    def formula(person, period, parameters):
+        """Calculate if person meets work conditions for:
+        - Single working adult
+        - Couple where either both work or one works and other has disability/incapacity
+        """
+        benunit = person.benunit
+        is_adult = person("is_adult", period)
+
+        # Basic work status
+        in_work = person("in_work", period)
+
+        # Get disability/incapacity conditions like we did in childcare age eligibility
+        gc = parameters(period).gov.dwp.pension_credit.guarantee_credit
+        standard_disability_benefits = gc.child.disability.eligibility
+        severe_disability_benefits = gc.child.disability.severe.eligibility
+
+        is_disabled = (
+            add(person, period, standard_disability_benefits)
+            | add(person, period, severe_disability_benefits)
+        ) > 0
+
+        has_incapacity = person("incapacity_benefit", period) > 0
+
+        # Build conditions
+        # Single adult conditions
+        is_single = benunit.sum(is_adult) == 1
+        single_working = is_single & in_work
+
+        # Couple conditions
+        is_couple = benunit.sum(is_adult) == 2
+        partner_in_work = in_work
+        partner_has_condition = is_disabled | has_incapacity
+
+        couple_both_working = is_couple & in_work & partner_in_work
+        is_partner_working_with_disabled_person = (
+            is_couple & partner_in_work & (is_disabled | has_incapacity)
+        )
+        is_person_working_with_disabled_partner = (
+            is_couple & in_work & partner_has_condition
+        )
+
+        return (
+            single_working
+            | couple_both_working
+            | is_person_working_with_disabled_partner
+            | is_partner_working_with_disabled_person
+        )

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

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+from policyengine_uk.model_api import *
+
+
+class tax_free_childcare(Variable):
+    value_type = float
+    entity = BenUnit
+    label = "Tax-free childcare government contribution"
+    documentation = "The amount of government contribution provided through the tax-free childcare scheme"
+    definition_period = YEAR
+    unit = GBP
+
+    def formula(benunit, period, parameters):
+        """
+        Calculate the government contribution for tax-free childcare.
+
+        Args:
+            benunit: The benefit unit
+            period: The time period
+            parameters: Policy parameters
+
+        Returns:
+            float: The calculated government contribution
+        """
+        # Get parents contribution
+        parents_contribution = benunit("childcare_cost", period)
+
+        # Get parameters from the parameter tree
+        p = parameters(
+            period
+        ).gov.hmrc.childcare_subsidies.tax_free_childcare.contribution_parameters
+
+        # Check eligibility conditions
+        meets_age_condition = benunit("child_age_eligible", period)
+        meets_income_condition = benunit.any(
+            benunit.members("meets_income_requirements", period)
+        )
+        is_eligible = (
+            meets_age_condition
+            & meets_income_condition
+            & benunit("incompatibilities_childcare_eligible", period)
+        )
+
+        # Determine the maximum eligible childcare cost for a single child
+        max_amount = 0
+        for child in benunit.members("is_child", period):
+            if is_eligible[child]:
+                if child("is_disabled", period):
+                    max_amount = p.contribution_rates.disabled_child.yearly_max
+                else:
+                    max_amount = p.contribution_rates.standard_child.yearly_max
+
+        # Calculate the government contribution
+        government_contribution = min(
+            parents_contribution
+            * p.contribution_rates.government_contribution_ratio,
+            max_amount,
+        )
+
+        return where(is_eligible, government_contribution, 0)