Ada and Steve are a couple with a one-year-old child, Abela. Ada has been on maternity leave and is due to go back to work full time as an antique book publisher. Steve is employed full time as a gardener. Both parents are below the state pension age and live in the Eden district, in Cumbria. They are looking into arranging Abela's childcare once Ada starts work again.

Abela can attend a local nursery full time nearby from Monday to Friday, at a cost of 225 per week. Ada also receives child benefit for Abela, equating to 1094.60 per year.

1. If Steve decides to take the part-time option, this would reduce his net annual income to 9,120. Ada would continue to receive her full-time earnings, which equate to 17,512 per year after tax and National Insurance contributions. Abela would then only attend nursery on a part-time basis at a cost of 113 per week.

Using theTax credit calculatorwhere appropriate, calculate the couple's total tax credit entitlement and their net household income after childcare costs.

1. The household is also considering a second option, whether Steve should stay in full-time employment, with Abela going to nursery full time.

Using theTax credit calculatorwhere appropriate, work out their tax credit entitlements and net household income after childcare under this option, and compare the short-term financial situation of the household with the previous option