4. Eligibility - early years' provider agreement

Early years' provider agreement effective from 1 April 2026. Eligibility.

Eligibility

Early years entitlements can be claimed for:

• eligible early learning for 2-year-olds (15 hours)

• all children aged 3- and 4-years-old (15 hours)

• children aged 9-months-old to 4-years-old of eligible working parents and carers (30 hours, for children aged 2 to 4 years this can be combined with either of the above entitlements to a maximum of 30 hours)

4.1 The local authority will not fund children before eligibility commences. The local authority will not backdate funding prior to the eligibility being confirmed. Providers should ensure they have confirmation of the eligibility codes prior to offering an early years’ entitlement funded place.

4.2 The provider must check original copies of documentation to confirm the parent meets the eligibility criteria (where relevant) and that the child has reached the relevant age before the child starts their place for all the early years entitlements (e.g. passport, birth certificate, NHS Red Book). The provider should record the document seen on the Parent/Carer Declaration form and record the date of birth in the Provider Portal.  The provider can choose to retain paper or digital copies of documentation although this is not a requirement. Where a provider retains a copy of documentation, it must be stored securely and deleted when there is no longer a good reason to keep it. 

4.3 The provider should ensure that a child is eligible for funding before the child is offered a place.

All 3 and 4-year-olds – weekly funding entitlement

4.4 All 3- and 4-year-old children are entitled to 15 weekly funded hours over a 38 week academic year from the start of the term following their third birthday, until they reach statutory school age. 

4.5 Children will be entitled to the early years' entitlement funding until they are on-roll in a state-funded school reception class or reach compulsory school age (the beginning of the term following their fifth birthday).

The child is entitled to a full-time school place in the September following their fourth birthday.

Working Parent Entitlement (HMRC eligibility codes)

4.6 Eligible 3 and 4-year-olds can access an additional 15 funded hours per week in addition to the weekly funded hours. Meaning that eligible children can access a total of 30 funded hours per week from the term following their third birthday.

Eligibility criteria and application for the working parent entitlement.

4.7 In addition to the 3- and 4-year-olds, eligible children from 9 months to 3 years old can access up to 30 funded hours per week, the term after they reach the relevant age.  

4.8 Most parents/carers applying for eligibility codes will get an immediate determination of eligibility, but HMRC may require further information to make the decision for some parents/carers. Providers should encourage parents/carers to apply in good time and to note the code end date to inform parents about reconfirming their details and ensuring these are up-to-date through their childcare account.

4.9 The local authority cannot fund a child within the same term in which parents/carers receive their eligibility code. Therefore, providers must be aware that eligibility codes they receive from parents/carers are only valid from the start of the following term.

4.10 The local authority does not have discretionary funds to secure additional funded hours where the parent has applied or reconfirmed after the 31 August, 31 December or 31 March deadline dates.

4.11 Providers must ensure parents/carers complete all relevant sections of the Parent/Carer Declaration form to obtain written consent from, or on behalf of parent/carers, to enable the local authority to undertake funded entitlement checks. 

4.12 Once the provider has obtained written consent from the parent/carer on the Parent/Carer Declaration form, they must verify the eligibility of the code before the child is offered a place.

4.13 The Eligibility Checking Engine (ECE) allows all local authorities to make instant checks for code validity.  The local authority provides a validity checking service to providers via the online Provider Portal, to enable verification of HMRC codes. This service is available all year round, regardless of whether the portal is open for the submission of funded hours.

4.14 The provider must ensure the consent box on the Provider Portal is ticked, to enable the local authority to carry out eligibility checks.

4.15 Audit checks to review the validity of eligibility codes for children who qualify for the early years' entitlement funding, will be undertaken at each monthly submission. Providers will be notified, in the ‘Actuals’ section of the Provider Portal for the corresponding monthly payment term. Where a parent's code has fallen out of eligibility and entered the grace period, a yellow warning triangle will be displayed in line with the dates listed in table A.

4.16 The provider has a responsibility to alert parents/carers that their eligibility end date is due to expire and encourage them to access their childcare account as a matter of urgency.

4.17 The local authority should ensure that the eligible child has an early years' entitlement place no later than the beginning of the term following the child turning 9 months of age or the child's eligible birthday and the parent meeting the eligibility criteria:

• 1 January - 31 March to take up a funded place during the summer term beginning on or following 1 April
• 1 April - 31 August to take up a funded place during the autumn term beginning on or following 1 September
• 1 September - 31 December to take up a funded place during the spring term beginning on or following 1 January

Best Start in Life

4.18 Children in foster care are eligible for the entitlement funding, providing their foster carers meet the eligibility criteria for foster carers and this is consistent with the child's care plan. Foster carers should apply directly to the local authority who has parental responsibility for the child to determine their eligibility. For children for whom Derbyshire has parental responsibility or other related queries, email: info.fis@derbyshire.gov.uk

4.19 The Ministry of Defence (MOD), Department for Education (DfE) and HMRC have agreed a manual process for service families posted outside of England, to apply for the extended entitlement when they are returning to England after a term start date. Eligibility criteria for service families is the same as for regular applications, and MOD staff will provide HMRC with evidence of their posting before a code will be issued. For more information visit Childcare for Service children.

The grace period

4.20 A child will enter the grace period when the child's parents/carers cease to meet the eligibility criteria set out in the Childcare (Early Years Provision Free of Charge) (Extended Entitlement) Regulations, as determined by HMRC or a First Tier Tribunal in the case of an appeal.

4.21 The local authority accesses information via the DfE’s Eligibility Checking Engine to confirm whether a child has ceased to meet the eligibility criteria and entered the grace period.  The grace period end date will automatically be applied to eligibility codes. 

4.22 The grace period is intended to be used for parents/carers whose financial situation has changed, for example, a parent/carer who may have lost their employment. Providers should not rely on the grace period end date in other circumstances.

4.23 The local authority will continue to fund a place for a child who enters the grace period as set out in the Early Years and Childcare Statutory Guidance for Local Authorities.

4.24 The provider should be aware that a child is not eligible to start a new funded place at an early years’ setting during the code’s grace period. This also applies to those children who have been attending the same setting prior to taking up the funded hours.

Early Learning for 2-year-olds Funding (code issued by the local authority):

(Previously referred to as assessment-based funding)

4.25 

The provider should continue to offer places to children eligible for the early learning for 2-year-olds until they become eligible for the weekly funded entitlement for three and four-year olds. 

Families who meet the eligibility criteria for the 15 hours early learning for 2-year-olds, may also be entitled to access an additional 15 hours under the Working Family entitlement.

Where a family meets the eligibility criteria for both the early learning entitlement for 2- year-olds and the Working Family entitlement, funding claims must be submitted on the basis that the first 15 hours are allocated to the early learning entitlement, with the remaining 15 hours attributed to the Working Family entitlement. The local authority reserves the right to amend funding claims, where necessary, to ensure they are recorded in accordance with this requirement.

 Criteria for eligible early learning for 2-year olds

Parents/carers can check their own eligibility for the early learning for 2-year olds

The local authority will use the Department for Education’s eligibility checking system to verify that children meet the eligibility criteria including Universal Credit.

To confirm a child’s eligibility for the early learning for 2-year-olds , providers should have sight of the letter/email confirming the child’s code and valid start date, prior to offering a funded place.

If the parent or carer's immigration status says they have 'no recourse to public funds', they may still get funding for their 2-year-old.

Deferred school place

4.26 The early years entitlement only applies until a child either:

• reaches compulsory school age (the term following the child’s fifth birthday) or
• is on-roll for a school reception class from the start of the academic year (1 September) in which the child has their fifth birthday

You can find more information about school admissions applications including delayed admissions of summer born children.