This post was updated on 18th May 2023 to include the new childcare amounts that will apply from July 2023
Also, from summer 2023 childcare costs will be paid up-front to people returning to work
If you are a worker Universal Credit can cover 85% of your childcare costs up to a maximum of:
- £646.35 for one child (100% = £760.41)
- £1,108.04 for two or more children (100% = £1,303.57)
or from July 2023
- £950.92 for one child (100% = £1,118.73)
- £1,630.15 for two or more children (100% = £1,917.82)
Who Counts As A Worker?
To qualify you must be in paid work, or have an offer of work that is due to start before the end of your next assessment period.
If you have a partner they must also be in paid work unless they cannot provide your childcare because:
- They have been assessed as having Limited Capability for Work.
- They are a carer who spends more than 35 hours each week looking after someone who has a disability.
- They are temporarily absent from your household.
If you stop working you are treated as though you are still a worker during the assessment period in which your job ends and the assessment period following that.
If you make a new claim within one month of the end of your work you will be treated as a worker for your first Universal Credit assessment period.
You are treated as a worker for any time when you are getting Statutory Sick Pay, Statutory Maternity Pay, Ordinary Statutory Paternity Pay, Additional Statutory Paternity, Statutory Adoption Pay or Maternity Allowance.
What Counts As Childcare Costs?
You can claim for relevant childcare for a child or for a Qualifying Young Person until 1st September following their 16th birthday.
Charges that are covered by your employer or by the government in relation to Work Related Activity cannot be included.
Essentially, relevant childcare means childcare provided by a registered or accredited provider, but does not include “care provided… by a close relative… wholly or mainly in the child’s home”.
What Gets Paid, When?
Universal Credit it calculated by calendar-monthly assessment periods. You must report your childcare costs during an assessment period to get the Childcare Costs Element for that assessment period.
If you delay reporting your childcare costs until the following assessment period you will not receive a Childcare Costs Element unless ‘special circumstances’ caused the delay.
You only get a Childcare Costs Element in an assessment period in which
- The childcare was both paid for and provided; or
- The childcare was paid for, if it had been provided during any earlier assessment period; or
- The childcare was provided, if it was paid for in any of the two previous assessment periods.
You cannot get a Childcare Costs Element for charges paid more than two assessment periods in advance.
If the Secretary of State thinks that your charges are excessive for the amount of work that you do you won’t get the full amount..
You Have To Pay Up-Front And Claim It Back Later. That’s Stupid!
Yes it is!
The government claims that UC is all about helping people back to work, but the rules say that you can only get your money back after you have paid for the childcare and after it has happened. All of which, which puts a big barrier in the way of getting back to work.
And of course since it’s usually women who find themselves responsible for sorting out childcare, it’s women who bear the brunt of this pay-up-front rule
In a recent test case (Salvato), the high court found that this is unlawful, irrational and discriminatory.
Update:
This rule will be changed from July 2023 to allow payment of childcare costs up-front for people returning to work.
The details have not been published yet, so check back here for updates