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Parents on Universal Credit given more time to claim back childcare costs

Joanna Faith
Written By:
Joanna Faith

Working parents on Universal Credit will have an extra month to claim back their childcare costs under new rules.

Families can claim back up to 85 per cent of their childcare costs under Universal Credit but they have to cover the upfront costs first and then apply for a reimbursement.

The government said extending the period to make a claim from one month to two months will “provide parents with more flexibility and could help claimants with two or more children avoid losing out on more than £1,100 per month”.

However, campaigners say the change does not go far enough. They want ministers to redesign the system completely so that financial support is provided upfront.

Neil Leitch, chief executive of the Early Years Alliance, said: “Asking parents claiming Universal Credit to pay for childcare up-front before reimbursing them does not work. This is what parents and providers most want to see change.

“At the moment providers are forced to choose between allowing parents to pay in arrears or turning children away.

“We’ve heard how those who have let parents build up debt in order to access a childcare place are sometimes left unpaid as parents struggle to keep on top of other Universal Credit repayments and outgoings.”

Research from Save the Children found some parents on Universal Credit had to find an extra £800 to cover the cost of childcare over the summer, with some resorting to payday loans.

Leitch said: “Childcare should not be a luxury for families, particularly those from disadvantaged backgrounds whose children often benefit the most from early education.

“It’s not right that government policy should effectively prevent parents from accessing places; ministers should be doing all they can to change that, starting with providing upfront financial support for Universal Credit claimants needing childcare.”

Parents in work on Universal Credit with one child can claim up to £646.35 per month for childcare costs and up to £1,108.40 if they have two or more children.