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Summary

This toolkit is to support local authorities and early years providers who are taking part in the early years financial incentives programme (EYFI).

Financial incentive payments are available in 38 local authorities from July 2025. This aims to help:

• increase recruitment in early years’ settings
• support the sector through the childcare expansion in September 2025 and beyond

This document provides more information about the programme.

The Department for Education (DfE) reserves the right to change the information in this toolkit and updates will be given when needed.

Who this publication is for

The toolkit is for:

• early years providers and local authorities in England who are participating in EYFI
• individuals who will be able to claim a financial incentive

It may also be of interest to local authorities and early years providers not involved in the programme this year.

Contact us

If you have any queries about how the programme works, email EY.Financial-Incentives@education.gov.uk.

Information for providers

Early years providers are important to the success of the programme.

When providers recruit an eligible new starter, they can make a claim when:

• the individual is in post
• they have been notified by DfE that they can make a claim

Providers can then access DfE’s online portal and start the claim on their behalf, if they have submitted an expression of interest. This should take less than 5 minutes.

Expression of interest

Eligible providers who submitted an EOI, in order of first come first served, will be sent the link to the portal when it opens. They will then complete an application on the portal.

As there are a limited number of incentives and high numbers of EOIs, some providers who submitted their EOIs at the end of the opening window will be placed on a waiting list.

If further incentives become available during Autumn 2025, providers on the waiting list will be notified in the order in which they submitted their EOI. They will then be invited to make a full application.  

We expect that not all providers who submitted an EOI will be able to make a full application in the future.

How to use the online portal

The portal:

• has been developed and built by DfE and is designed to be quick and easy to use
• can only be accessed by providers on DfE’s ‘white list’ – they are the only ones who will be able to start a claim

Providers can make a claim via our online portal, and a link will be sent to providers who submitted an EOI on a first come first served basis.

After a provider has recruited an eligible new employee, the provider will start a claim on the employee’s behalf via the online portal. The person who does this will need to be one of the named contacts on the white list. When this stage is complete, the employee will receive an email inviting them to add additional information (like their bank account details) to complete the claim.

There are clear instructions on each page to help guide users through the application process.

When a provider has completed the claim, they will be sent an email containing a reference number. The provider and the new starter need to use this number to access the online portal.

Providers can only make applications on the online portal for the number of practitioners they originally submitted on the EOI form.

The white list

Local authorities provide DfE with a list of their providers. This then becomes the white list. Any provider within an eligible local authority but not on the white list (for example because they have recently opened) should contact their local authority. The local authority will then contact DfE and have the new provider added so that they make claims.

Online login

After the provider has completed their part of the claim, the employee will receive an email inviting them to complete the claim and provide further details.

The employee will need to create a account if they do not already have one. This is so that we can verify their identity. We’ll help them create a ÒÁÈËÖ±²¥ One Login account as part of the process.

What providers need before starting a claim

Before starting a claim the provider can help to make the process easier by making sure they:

• have the provider’s employer PAYE reference number to hand
• have basic information about the employee to hand such as their name, start date and email address
• are ready to answer questions confirming that the employee is eligible to receive an incentive

What the employee will need before completing their section of the claim

When the provider has started the claim and given basic information about the employee, the employee will get an email with a link for them to add some extra details.

Before completing this process the employee can make the process easier by making sure they:

• have the reference number that was sent to them in the invite email
• have a One Login account as this will be required to access the system (if they haven’t the portal will guide them through the process)
• are ready to confirm the basic information that has been inputted by the provider
• have bank account and National Insurance details to hand

Any queries about the online portal should be sent to EY.Financial-Incentives@education.gov.uk.

Paying the incentive to eligible employees

Eligible new starters will receive up to £1000 after tax and National Insurance. Tax and National Insurance will be paid by DfE. Incentives should be paid directly into their bank account.

The employee must complete 6 months in their role to receive the payment. DfE will contact the employer by email before that point to check that the employee is still in post. The payment will usually be made within a couple of months of this point.

If the employee leaves their employment at the early years provider before they have completed 6 months, the employer must tell DfE. They can do this by emailing EY.Financial-Incentives@education.gov.uk.

Time limits

All eligible employees must have been appointed after 15 July 2025 and before 15 March 2026 (or until incentives run out). Any employee appointed outside this time period will not be eligible to receive an incentive.

Eligible individuals

Eligible individuals are those who meet all the following criteria. They:

• are applying for their permanent first role at an early years provider required by to implement the early years foundation stage (other than a reception class or childminder), or returning after a break of at least 6 months
• have got a role that involves directly working with children for at least 70% of the time
• are employed by a provider taking part in the programme, which is located in a local authority taking part in the programme

Working directly with children can involve any of the following:

• working in the room with children – this can include playrooms, base rooms and classrooms
• guiding, supporting and interacting with children in their learning and development
• giving hands-on care, including health and hygiene

70% or more time applies to all part- and full-time roles. The employee does not need to work a minimum number of contracted hours to be eligible.

Returners are defined as those who left the profession at least 6 months before they started their new role. Anyone who left a permanent role in the profession less than 6 months before they started their new role will not be eligible for an incentive.

If the new employee has worked in an early years setting in the 6 months before starting their current role, they can receive an incentive if their work was:

• voluntary or unpaid
• casual and temporary

Casual or temporary work could include:

• zero-hour contracts
• guaranteed minimum hour contracts
• self-employed or freelance contracts
• fixed term contracts
• agency work and apprenticeship roles

Apprenticeships

Apprentices cannot receive a payment, even if they’re on a permanent contract during their apprenticeship.

They can receive a payment when they move from being an apprentice to an employee. To do this, they must have passed their apprenticeship and been taken on in a permanent role.

Temporary and part time workers

Those on temporary contracts are not eligible to receive an incentive. They are only available for those recruited on a permanent basis.

The incentive is not paid on a pro rata basis. This means that part-time workers are eligible for 100% of the payment, regardless of the numbers of hours they work. Find out more information about pay, bonuses and part time workers’ rights

Universal Credit

If the person receiving an incentive is in receipt of Universal Credit, the amount of Universal Credit they receive will depend on how much they earn each month.

Universal Credit payments reduce as wages go up, and increase again if the individual stops working or their wages go down.

If the employee earns over a certain amount each month then their Universal Credit will stop until they fall below the threshold again. Find out more about Universal Credit and earnings.

Student loans

If the person receiving the incentive is currently repaying a student loan, a deduction towards it may come out of their £1000 payment.

If they have a student loan but are not currently repaying it and their payment takes them over the amount they must earn to start paying back a student loan, a deduction may go towards repaying it.

Information is available on:

• when they would start paying back a student loan
• what they’ll pay
• getting a refund – if their income for the financial year is below a certain level they may be able to claim the student loan payment back

Information for local authorities

Local authorities have a light touch role in the delivery of the EYFI programme. Their only formal role is to provide DfE with an up-to-date list of eligible providers on a template provided by DfE.

Eligible local authorities

Targeting decisions have been based on information we have showing where workforce sufficiency risks for the entitlement expansion are most acute. This includes intelligence from the regular conversations that we have with local authorities and data estimating workforce need.

There are 38 local authorities taking part in this round:

• Bedford
• Birmingham
• Bolton
• Bournemouth: Christchurch and Poole
• Calderdale
• Cornwall
• County Durham
• Cumberland
• Darlington
• Derbyshire
• Devon
• Dorset
• Dudley
• East Sussex
• Essex
• Gateshead
• Hampshire
• Kent
• Kingston Upon Hull, City of
• Leeds
• Newcastle upon Tyne
• Norfolk
• North Somerset
• North Tyneside
• Nottingham
• Nottinghamshire
• Oxfordshire
• Rochdale
• Sheffield
• Suffolk
• Sunderland
• Swindon
• Telford and the Wrekin
• Thurrock
• Torbay
• Trafford
• Warwickshire
• West Northamptonshire
• Westmorland and Furness

Overview of the process

1. Local authorities provide DfE with a list of their providers. These are uploaded to the online portal and form a ‘white list’.

2. Early years providers who expressed an interest earliest will be invited to access the portal on a first come, first served basis to fill in a short form on behalf of the practitioners they have submitted an EOI for.

3. Providers who expressed interest but were not invited to access the portal and submit a claim will be put on a waiting list.

4. Providers who submitted an EOI and then submitted a claim through the portal will be sent a link to their eligible worker. The eligible worker logs on and enters bank details.

5. After 6 months the provider confirms that the person is still in post.

6. DfE pays the individual a £1000 incentive payment.

Glossary of terms

Eligible local authorities

The list of local authorities where financial incentives can be offered. To be eligible to receive an incentive, an employee must be employed at an eligible provider located in one of these local authorities.

Eligible early years staff

Those who are starting work on a permanent basis in a local authority taking part in the programme, and who are joining an early years provider required by section 40(2) Childcare Act 2006 to implement the early years foundation stage, other than a reception class or childminder.

They must also be new or returning to the profession after 6 months, and must spend at least 70% of their time working directly with children.

Eligible provider

An eligible provider is an organisation located in a local authority participating in the programme which is required by section 40(2) Childcare Act 2006 to implement the early years foundation stage, other than a reception class or childminder.

Online portal

The online portal is where providers can start a claim when an eligible worker has started their role. It is also the site that employees will need to visit to confirm basic data and add their bank account details.