Smiling toddler sitting at a table

Universal Credit and childcare costs – big changes on the way

Parents on Universal Credit may get back more of their childcare costs

If we’re on Universal Credit we’ll soon be able to claim back more of our childcare costs.

At the moment, we can claim back costs capped at £646 a month for one child or £1,108 for two or more.

After June 28 these caps will rise to £951 and £1,630 a month.

We can claim back up to 85 per cent of our costs as long as it’s not more than the caps above.

Upfront payments

Another big change that’s coming is the move to pay a portion of our childcare costs upfront.

Until now we’ve paid the fees and had to claim back what we were entitled to.

This makes life tricky when we’re moving into work. It means we have to pay for childcare before we’ve had our first wage.

To qualify for upfront payments we’ll have to be entering work or upping our hours by quite a bit. It’s up to our work coach to decide if we’re increasing our hours enough to qualify.

If we’re not eligible for upfront payments, we’ll still qualify for the same increased caps. It’s just that we’ll get the money after the childcare has taken place – so we may be out of pocket for a time.

We should speak to our work coach as soon as possible if we think upfront childcare costs could help us out.

No change for Working Tax Credits

If we’re on Working Tax Credits rather than Universal Credit, the amounts we can claim are still £122.50 a week for one child and £210 a week for two or more.

It could be the case that we’d be better off switching over to Universal Credit now, before we’re moved as part of the ‘managed migration’ process.

But we should be sure we’ll be better off first. The Quids in! Benefits Calculator will help us work out what’s best for us.

And if we’re not claiming any benefits, the calculator will show us if there’s anything we could be entitled to.

Image: Alexander Dummer / Pexels

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