Can Family Members Get Paid for Caring for your Child?

Not everyone has got the luxury of being able to afford a childminder or a nursery when they return to work. In fact, a lot of us choose to turn to family members – namely, retired grandparents – to look after our kids to help save money.

Yet, are they actually entitled to anything? For instance, if they are looking after your children regularly, then can you pay them for ‘acting’ as a childminder?

The Situation

Nearly 97% of families in the UK turn to grandparents or other close relatives for childminding support. This can range from picking up/dropping children at school, or looking after them for the entire day whilst parents work.

Bearing this in mind, it makes sense to wonder if you should pay them for their childminding duties. Yet what are the legal implications of this? If you are paying someone as a childminder, are there rules?

When should someone register as a childminder?

Legally, you should register as a childminder if you are caring for children: who are not close relatives; if you are doing it for more than two hours a day, and if you are charging for it.

Similarly, once registered as a professional childminder, you will need to undergo a DBS to determine that you are safe to work with children; that you have got a paediatric first aid certificate (if you haven’t got one you need one), and that you have been inspected by OFSTED (UK).

What is classed as a close relative – in relation to childminding?

Close relatives are usually classed as grandparents and aunts/uncles – essentially immediate family. Cousins or more distant relatives are just outside of this group, and may need to register as a childminder – in the eyes of the law – if they look after your child on a regular basis.

The rules on this are not very clear though, so if you are not sure we recommend investigating further.

However, it is also important to note here that whilst close relatives don’t need to register, technically they can charge for looking after your child.

Can grandparents and aunts/uncles charge for taking care of your child?

Now this is a little bit of a grey area. Whilst it is not uncommon for parents to give money to relatives who look after their children regularly; there is much debate over whether they should declare this money and pay income tax (by declaring themselves on a self-assessment form), or whether it should be seen as a token gesture payment.

In the case of token gestures, they can be counted as such if they are less than a childminder’s professional rate. At the moment 25 hours of childcare (per week) for an under 2 year old is around £107. Full time it is £227 per week.

Can you call them ‘expenses’, rather than payments?

For many people, the reason why they rely on relatives and grandparents is because it wouldn’t be worth returning to work if they had to pay for childcare. Similarly, for parents who work odd hours or shifts, getting a childminder who can do these types of hours is hard.

This isn’t a problem with relatives, as they can easily have their grandchildren to sleep over; can run them to school in the morning, and will happily look after them during the holidays.

Bearing all of this in mind, the money you offer could easily be construed as expenses for things such as food or for taking them on outings during half term.

Now, should you find yourself in a situation where your relative wants a childminders rate, then it may be worth using a professional childminder instead. After all, if you are paying them the same rate, then you may as well take advantage of the activities, play and learning exercises that childminders offer.

So can grandparents get paid?

In the last few years, it has become possible for grandparents in the UK to be paid for looking after their grandchildren full time. This is usually deducted from the parents own contributions and is transferred to the grandparents instead. For more information, we recommend visiting the HMRC. Alternatively, to find out more about the service childminders provide, take a look at our online childminding courses.