Last reviewed 8 September 2015

Early years pupil premium (EYPP) has been introduced this year in an initiative intended to provide additional funding for disadvantaged children. Martin Hodgson, education consultant, describes exactly what early years pupil premium is and how it is being applied.

What is Early Years Pupil Premium?

EYPP is a financial allocation made by the Government to give providers of early years education extra funding to support disadvantaged 3- and 4-year-olds. The premium was introduced in April 2015, with a £50 million budget allocated to local authorities for the 2015/2016 financial year. Local authorities are required to make the appropriate payments to service providers.

The EYPP is an extension of a funding system that has been in place in schools for some years. All early years providers who are eligible to receive funding for the 3- and 4-year-old early education entitlement are also eligible to receive the EYPP

Eligible children

Guidance on identifying eligible children is provided on the Department for Education (DfE) website. This states that 3- and 4-year-olds in state-funded early education will attract EYPP funding if they meet at least one of the following criteria.

  1. 1. Their family gets one of the following.

    • Income Support.

    • Income-based Jobseeker’s Allowance.

    • Income-related Employment and Support Allowance.

    • Support under part VI of the Immigration and Asylum Act 1999.

    • The guaranteed element of State Pension Credit.

    • Child Tax Credit (provided they’re not also entitled to Working Tax Credit and have an annual gross income of no more than £16,190).

    • Working Tax Credit run-on, which is paid for 4 weeks after they stop qualifying for Working Tax Credit.

    • Universal Credit.

  2. They are currently being looked after by a local authority in England or Wales.

  3. They have left care in England or Wales through:

    • an adoption

    • a special guardianship order

    • a child arrangement order.

The guidance stresses that children must be in receipt of free early education in order to attract EYPP funding.

All 3- to 4-year-olds in England can get 570 hours of free early education or childcare per year. This is usually taken as 15 hours each week for 38 weeks of the year with parents starting to claim after a child turns 3. Some 2-year-olds are also eligible.

Families do not have to take up the full 570 hours of early education they are entitled to in order to get EYPP.

The DfE guidance states that once a child previously eligible for EYPP starts school he or she will not become automatically eligible for the school-age pupil premium.

Identifying eligible children

Early years providers themselves are responsible for identifying which of the children in their care may be eligible for the EYPP. They must then pass this information on to their local authority. Local authorities should encourage providers to speak to their parents in this regard, especially those parents of children who took up the early education entitlement for 2-year-olds, as these children are most likely to attract EYPP when they turn 3.

The DfE has published a model form and letter to help early years providers identify which children are eligible for the pupil premium.

Providers are advised to ask all parents and guardians, regardless of family income or circumstances, to complete the form when they enrol their child. They can use the template letter to explain to parents what the EYPP is and why the form is necessary. The form can be adapted as required and some local authorities have produced their own forms.

Eligibility checks

Local authorities are required by the DfE to check the eligibility of any child that a parent or early years provider refers to them. This involves:

  • first checking a child’s eligibility when a child is referred by a provider or parent

  • rechecking in the academic year when the child is taking up their 4-year-old entitlement.

The purpose of the recheck is to find out if the child’s circumstances have changed and if he or she has stopped being eligible as a result. In cases where a child becomes eligible when already 4 years old, the DfE advises that the second check is not required.

The child’s parents or legal carers should be informed of the outcome of the check, as should the early years provider where the child receives early years education. No one else should be informed.

Local authorities are able to use an online eligibility checking system (ECS) to check a child’s eligibility.

A different process must be followed for children who have been adopted from local-authority care or are subject to a child arrangements order.


The DfE guidance instructs local authorities to allocate the funding to providers based on how many eligible pupils they have and how many hours of state-funded early years education these children take up. Conditions cannot be placed on the funding, which should follow the eligible child. Thus, if a child moves to a different provider part way through the year, the money should go with them.

All eligible children are funded at the same national rate. For 2015/2016 this is set at 53p per hour per eligible pupil. Thus for each eligible child who takes up its full 570 hours of state-funded early education, providers will receive £302.10.

Further information about the national rate can be found in the School and Early Years Finance (England) Regulations 2014.

In cases where a child receives early education at a provider based in a different local authority, the provider’s local authority is responsible for funding the EYPP for the child and for checking the child’s eligibility.

Funding available

The Government states that it has based its 2015 to 2016 allocations for each local authority on an estimate of how many eligible children they expect will take up their entitlement. The estimate has been made by looking at how many 3- and 4-year-olds take up their entitlement to free early education and how many older children take up free school meals.

From January 2016, the Government states that it will use school census and early years census to collect information on how many eligible children in an area are taking up their entitlement to EYPP and the eligibility criteria these children meet. This data will be used to further inform funding levels for each local authority for the financial year 2016/2017 onwards.

The early years census is a statutory duty on local authorities. To fulfil their duty, each January authorities must submit data about early years providers who receive direct government funding for 2-, 3- or 4-year-olds.