Universal Credit childcare help defined as claimants due £29 extra
Some parents could get nearly £30 more
From today, April 7, the maximum amount that individuals can claim for their childcare costs is set to increase. However, people will still only be able to claim up to 85% of their childcare costs back through their Universal Credit benefit.
Previously, it covered £1,014.63 per month for one child and £1,739.37 per month for two or more children. Now, these amounts will rise to £1,031.88 for one child, and £1,768.94 for two or more children.
These sums are claimed in arrears and based on actual childcare costs. Essentially, you pay for the childcare first and then report these figures to claim back your costs and it’s means-tested against your income for that month before the DWP decides how much to compensate.
Other Universal Credit elements and payments are also increasing from today by 1.7% as part of the annual rise at the start of the financial year. To qualify for the childcare element of Universal Credit, you and your partner typically need to be in paid work. The number of hours you work doesn’t usually affect your eligibility.
Exceptions might be made if one parent has limited work capabilities or they are caring for a child with severe disabilities. The childcare must also be provided by people or organisations registered with OFTSED, the Care Inspectorate in Scotland or the Care Inspectorate Wales.
This encompasses childcare from various providers such as nurseries, childminders, nannies, breakfast clubs, after school care and holiday clubs. If the upfront costs of childcare are unaffordable, other support may be available through the Flexible Support Fund or a Budgeting Advance, though the latter must be repaid.
Childcare costs can be claimed at least a month before your job commences and up to a month after it concludes due to the arrears payment system. This system has recently been criticised, as reported by the Mirror.
The Institute for Policy Research’s study indicated that some families have experienced lengthy waits for their childcare costs to be reimbursed. Given that it considers actual childcare costs paid each month alongside your monthly earnings, there’s a possibility that no two monthly payments will be identical, making budgeting challenging.
The report called on the government to completely revamp the system so that working parents on Universal Credit who are struggling can be reimbursed for 100% of their childcare costs, potentially providing these funds directly to the provider. It emphasised how this would enable parents to work more hours or avail more employment opportunities.
Reacting to the report, a government spokesperson stated: “Good childcare is vital to both children and to hard working parents and we will continue to ensure families get the support they need. Parents receiving Universal Credit can already have up to 85% of their childcare costs reimbursed every month, and we urge anyone who needs assistance accessing this support to speak to their work coach.”
