MaxGhenis · Oct 24, 2026 · Oct 1, 2026 · Oct 1, 2026 · Oct 2, 2026 · Oct 2, 2026
diff --git a/changelog.d/1956.fixed.md b/changelog.d/1956.fixed.md
@@ -0,0 +1 @@
+- Targeted (2-year-old) childcare now qualifies through Pension Credit only when the family receives a guarantee credit, so pensioners who do not claim Pension Credit no longer qualify through a computed guarantee credit. Receipt of a guarantee credit now also requires a Pension Credit payment, so a reform that stops Pension Credit being paid closes the routes that read it.
diff --git a/docs/book/programs/gov/dfe/targeted-childcare-entitlement.ipynb b/docs/book/programs/gov/dfe/targeted-childcare-entitlement.ipynb
@@ -26,6 +26,8 @@
     "* **Income-related Employment and Support Allowance (ESA)**\n",
     "* **Pension Credit (Guarantee Credit)**\n",
     "\n",
+    "The regulations require the parent to be entitled to the guaranteed element of State Pension Credit. Entitlement needs the claimant to have attained the qualifying age ([State Pension Credit Act 2002 s.1(2)(b)](https://www.legislation.gov.uk/ukpga/2002/16/section/1)), excludes a couple whose other member has not ([s.4(1A)](https://www.legislation.gov.uk/ukpga/2002/16/section/4)) unless [SI 2019/37 art 4](https://www.legislation.gov.uk/uksi/2019/37/article/4) saves them, and needs a claim ([Social Security Administration Act 1992 s.1](https://www.legislation.gov.uk/ukpga/1992/5/section/1)). PolicyEngine counts Pension Credit when the family receives a guarantee credit: the claimant has reached State Pension age, and so has any partner unless the couple is saved by SI 2019/37 art 4; the family claims Pension Credit and is paid it; and its guarantee credit is positive. A working-age family therefore never qualifies through Pension Credit in the model, even when its income is below the minimum guarantee, and nor does a pensioner who does not claim it. A mixed-age couple qualifies when the model treats it as saved by SI 2019/37 art 4, which it infers from reported Pension Credit or pension-age Housing Benefit unless the saving is set directly. The model does not distinguish entitlement from payment. In law they can differ, for example where a credit of under 10p a week is not payable ([SI 2002/1792 reg 13](https://www.legislation.gov.uk/uksi/2002/1792/regulation/13)).\n",
+    "\n",
     "#### Eligibility conditions\n",
     "Families may also qualify based on income thresholds if they receive:\n",
     "* **Universal Credit** with earned income of **£15,400 or less** per year (combined for a couple), as Universal Credit calculates it: earnings after the person's own tax, National Insurance and pension contributions, and before the work allowance (`uc_earned_income_before_work_allowance`)\n",

diff --git a/policyengine_uk/parameters/gov/dfe/targeted_childcare_entitlement/qualifying_benefits.yaml b/policyengine_uk/parameters/gov/dfe/targeted_childcare_entitlement/qualifying_benefits.yaml
@@ -1,10 +1,12 @@
-description: The Department for Education designates these programs as qualifying benefits for the targeted childcare entitlement eligibility (the 2-year-old entitlement) in England. The child's parent must be entitled to one, so income-based JSA and income-related ESA count only as the claimant's or partner's award.
+description: The Department for Education designates these programs as qualifying benefits for the targeted childcare entitlement eligibility (the 2-year-old entitlement) in England. The child's parent must be entitled to one, so income-based JSA and income-related ESA count only as the claimant's or partner's award, and Pension Credit counts only as receipt of a guarantee credit, which needs the qualifying age and a claim, rather than the guarantee credit amount, which is computed whether or not the family claims.
 metadata:
   reference:
     - title: The Local Authority (Duty to Secure Early Years Provision Free of Charge) Regulations 2014 - regulation 1(2), "eligible child"
       href: https://www.legislation.gov.uk/uksi/2014/2147/regulation/1
     - title: The Local Authority (Duty to Secure Early Years Provision Free of Charge) (Amendment) Regulations 2018 - part 2.a
       href: https://www.legislation.gov.uk/uksi/2018/146/regulation/2/made
+    - title: State Pension Credit Act 2002 - section 1(2), entitlement requires the qualifying age
+      href: https://www.legislation.gov.uk/ukpga/2002/16/section/1
   period: year
   unit: program
   label: Qualifying benefits for targeted childcare entitlement
@@ -13,4 +15,4 @@ values:
     - income_support
     - claimant_or_partner_jsa_income
     - claimant_or_partner_esa_income
-    - guarantee_credit
+    - in_receipt_of_guarantee_credit
diff --git a/...eline/gov/dfe/targeted_childcare_entitlement/targeted_childcare_entitlement_eligible.yaml b/...eline/gov/dfe/targeted_childcare_entitlement/targeted_childcare_entitlement_eligible.yaml
@@ -10,7 +10,7 @@
         income_support: 0
         jsa_income: 0
         esa_income: 0
-        guarantee_credit: 0
+        in_receipt_of_guarantee_credit: false
         meets_working_tax_credit_criteria_for_targeted_childcare_entitlement: true
         extended_childcare_entitlement_eligible: false
   output:
@@ -28,7 +28,7 @@
         income_support: 0
         jsa_income: 0
         esa_income: 0
-        guarantee_credit: 0
+        in_receipt_of_guarantee_credit: false
         meets_working_tax_credit_criteria_for_targeted_childcare_entitlement: true
         meets_universal_credit_criteria_for_targeted_childcare_entitlement: false
         extended_childcare_entitlement_eligible: false
@@ -47,7 +47,7 @@
         income_support: 0
         jsa_income: 0
         esa_income: 0
-        guarantee_credit: 0
+        in_receipt_of_guarantee_credit: false
         meets_universal_credit_criteria_for_targeted_childcare_entitlement: false
         working_tax_credit_run_on: true
         extended_childcare_entitlement_eligible: false
@@ -66,7 +66,7 @@
         income_support: 0
         jsa_income: 0
         esa_income: 0
-        guarantee_credit: 0
+        in_receipt_of_guarantee_credit: false
         meets_universal_credit_criteria_for_targeted_childcare_entitlement: false
         meets_child_tax_credit_criteria_for_targeted_childcare_entitlement: true
         extended_childcare_entitlement_eligible: false
@@ -85,7 +85,7 @@
         income_support: 0
         jsa_income: 0
         esa_income: 0
-        guarantee_credit: 0
+        in_receipt_of_guarantee_credit: false
         meets_universal_credit_criteria_for_targeted_childcare_entitlement: false
         meets_child_tax_credit_criteria_for_targeted_childcare_entitlement: true
         extended_childcare_entitlement_eligible: false
@@ -104,7 +104,7 @@
         income_support: 0
         jsa_income: 0
         esa_income: 0
-        guarantee_credit: 0
+        in_receipt_of_guarantee_credit: false
         meets_universal_credit_criteria_for_targeted_childcare_entitlement: true
         extended_childcare_entitlement_eligible: false
   output:
Original file line number	Diff line number	Diff line change
		@@ -0,0 +1 @@
		- Targeted (2-year-old) childcare now qualifies through Pension Credit only when the family receives a guarantee credit, so pensioners who do not claim Pension Credit no longer qualify through a computed guarantee credit. Receipt of a guarantee credit now also requires a Pension Credit payment, so a reform that stops Pension Credit being paid closes the routes that read it.