THE Department for Work and Pensions (DWP) has issued a major update on childcare changes for those on Universal Credit.
It comes just days before the childcare element of the benefit will get a bumper payment boost.
PA:Press AssociationThe DWP has issued a major update on who qualifies for upfront childcare payments for those on Universal Credit[/caption]
But the DWP has now issued further guidance to work coaches to decide exactly who qualifies for new upfront childcare payments.
At the moment, parents on Universal Credit can claim back 85% of their childcare costs – but they have to pay first before claiming the money back later on.
The maximum amount of cash that parents can claim has also stayed the same for many years, despite the cost of care rising.
But from June 28, parents will get a payment boost and childcare costs for some of those on Universal Credit will be paid upfront.
It’s a huge win for The Sun’s Make Universal Credit Work campaign, but thousands are still likely to miss out on upfront payments if they don’t take action.
At first, the government said that only those who start work or “significantly increase” their hours would be eligible for upfront cash.
However, it gave no indication of how many more hours parents would need to work to qualify.
But the DWP has now told The Sun that there isn’t a minimum amount of working hours to qualify for this change.
Instead, Universal Credit work coaches have been told that parents need to increase their hours by “at least a few hours more every week” to qualify for upfront cash.
Any increase in work hours would need to alter their childcare pattern by at least a few hours per week over the course of a month.
This means that parents will be expected to require more childcare hours to qualify.
It’s vital that claimants entering work or increasing their hours speak to their work coaches as soon as possible to request upfront childcare cash.
However, the change to payments will fall short of helping those who are already in work and choose not to increase their hours.
These claimants will continue to receive the childcare element paid in arrears.
The DWP has also told The Sun that other external factors like debt and deductions won’t be taken into account when assessing if a claimant is eligible for upfront childcare payments.
Any decision on childcare support will relate solely to hours worked.
However, all 119,000 claimants who get the childcare element as part of their Universal Credit claim will benefit from a payment boost.
The amount of cash parents can claim will go up from £646 to £951 for one child, and from £1,108 to £1,630 for two – an increase of just under 50%.
But it’s important to note that while the new rates come into force on June 28, most won’t see their payments rise until August.
This is because of the way in which the assessment period for Universal Credit work.
For example, if your assessment period starts after June 28, you may see an increase at the beginning of August.
And if your assessment period starts before June 28, you may see the increase in the middle or end of August.
Why are childcare payments changing?
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 make 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.