Government extension grants parents more time to claim childcare costs through Universal Credit

Olivia Rook
Tuesday, September 10, 2019

The early years sector warned that paying upfront childcare costs ‘does not work’ and urged the Government to provide better financial support for Universal Credit claimants.

Working parents and guardians can apply for up to £646.35 per month if they have one child, and those with two or more children can receive a maximum of £1,108.40.
Working parents and guardians can apply for up to £646.35 per month if they have one child, and those with two or more children can receive a maximum of £1,108.40.

Working parents and guardians will be given an extra month to claim back childcare costs, according to an announcement from the Department for Work and Pensions.

Previously, parents had to report costs in the same month-long Universal Credit assessment period in which they were incurred.

Not only does the extension provide parents with more flexibility, it could also help claimants with two or more children avoid losing out on more than £1,100 per month.

The change has been well received by those in the childcare sector, yet many believe a system that asks parents to pay upfront for childcare does not work.

Neil Leitch, chief executive of the Early Years Alliance, said: ‘Asking parents claiming Universal Credit to pay for childcare upfront 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.’

Up to 85 per cent of childcare costs can be reimbursed through Universal Credit. Working parents and guardians can apply for up to £646.35 per month if they have one child, and those with two or more children can receive a maximum of £1,108.40.

Mr Leitch continued: ‘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.’

Mims Davies, minister for employment, said: ‘We are determined to support families to balance work-life and parenthood. Allowing an extra month-long assessment period for people to report their childcare costs means people shouldn’t have to worry about missing out on crucial payments they are entitled to.’

The Government has removed the seven-day waiting period, which means no one has to wait to make a claim. People can continue to receive Housing Benefit for two weeks while they wait for the first payment.

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