HUNDREDS of thousands of parents on Universal Credit will get a major £522 boost to childcare payments within weeks.
The same families will also benefit from a change which will see all childcare costs paid upfront.
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In a huge win for The Sun’s Make Universal Credit Work campaign, it means they won’t have to pay hundreds of pounds only to claim it back later.
At the moment, parents on Universal Credit can claim back 85% of their childcare costs – but they have to pay upfront first.
It means mums and dads have had to find more than £1,000 for a month’s nursery care in advance before getting any support.
But from Wednesday, June 28 all payments will be made upfront and families will benefit from a payment boost.
The maximum amount of cash parents can claim will also go up from £646 to £951 for one child, and from £1,108 to £1,630 for two – an increase of just under 50%.
The government will also help eligible parents cover the costs for the first month’s childcare when they enter work or significantly increase their hours.
Mel Stride, secretary of state for work and pensions, said: “These changes will help thousands of parents progress their career without compromising the quality of the care that their children receive.
“By helping more parents to re-enter and progress in work, we will be able to cut inactivity and help grow the economy.”
Why are childcare payments changing?
The changes to Universal Credit childcare payments are changing to help get more parents back into work.
The policy was first announced by Jeremy Hunt in the Spring Budget.
The Chancellor said: “I want to help the 700,000 parents on universal credit who, until the reforms I announced today had limited requirements to look for work.
“Many remain out of work because they cannot afford the upfront payment necessary to access subsidised childcare.”
It comes as a major win for The Sun’s Make Universal Credit Work campaign, which has been calling for childcare support to be paid upfront since December 2018.
Unfair and expensive childcare costs mean 75% of mums say it doesn’t makes financial sense to work, new research has found.
The Sun previously spoke to a mum-of-two who was desperate to work, but couldn’t because taking a job would mean she had to foot an £800 childcare bill upfront.
While, a working mum called the rules “nonsense” after they wiped out her £1,000 savings and left her thousands of pounds in debt.
She told The Sun: “The Universal Credit rules left me with no wiggle room so I wiped out my savings paying for childcare upfront.”
The Chancellor’s plans have been welcomed by charities who had warned of parents falling into debt due to the childcare system.
What other childcare help is available?
There are a range of tax breaks and grants to help make childcare more affordable.
You can usually use them for care like registered childminders, nannies, playschemes, nurseries, and holiday clubs.
It’s always worth checking the government’s handy childcare costs calculator to find out which scheme will save you the most money, as not all of them can be used at the same time.
Free childcare for 2-year-olds
Parents living in England and claiming any of the following benefits can access some free childcare for their two-year-olds:
- Income support
- income-based jobseeker’s allowance (JSA)
- income-related employment and support allowance (ESA)
- Universal Credit (where household income is £15,400 a year or less after tax, not including benefit payments)
- Tax credits (where household income is £16,190 a year or less before tax)
- Pension Credit (guaranteed element)
2-year-olds can also get free childcare if they:
- Are looked after by a local authority
- Have an education, health and care (EHC) plan
- Get disability living allowance
- Have left care under an adoption order, special guardianship order or a child arrangements order
You may have to pay for extra costs like meals, nappies or trips.
Contact your childcare provider or local council to find out more.
15 or 30 hours free childcare
All three to four-year-old children in England are entitled to 15 hours of free childcare – amounting to 570 hours per year – from the term after their third birthday.
The free allowance is usually taken as 15 hours per week for 38 weeks of the year, but it is possible to take it at a time that suits you.
The free early education and childcare must be with an approved childcare provider and stops when your child starts school.
Working parents may be eligible to get up to 30 hours of free childcare if they are working at least 16 hours a week on average and earning the National Minimum Wage or more.
Check out what you could get and apply online at Gov.UK.
Tax-free childcare
If you don’t qualify for Universal Credit you may qualify for tax-free childcare.
You can get up to £500 every three months – up to a maximum of £2,000 a year – for each of your children to help with the costs of childcare.
If your child is disabled, it’s even more – £1,000 every three months, up to £4,000 per year.
To receive the tax-free benefit you need to create an online childcare account.
For every £8 you pay into this account, the government will add £2 which you can use to pay your approved provider.
Child benefit
You can get child benefit if you’re responsible for a child aged under 16, or if they are under 20 and in approved education or training.
Child benefit is currently worth £24 a week for the eldest child or only child, adding up to £1,248 a year.
For each subsequent child, parents get £15.90 a week – or £826.80 a year.
The free money is paid every four weeks, and there’s no limit to how many children you can apply for – though only one person can claim for each child.
But do note that those who earn more than £50,000 a year may need to pay back some of their child benefit in tax.
While this help isn’t directly for childcare, the money can help to cut costs.
Use local charities
Certain organisations, such as the YMCA and local church groups, sometimes run after-school clubs for free.
Check whether there are any eligibility requirements by speaking to the organisation directly.
These services are intended for those who can’t pick their children up from school due to work responsibilities, for example.
