THE government is making two huge changes for millions of Universal Credit claimants.
Under new plans, parents claiming the benefit could save hundreds of pounds on childcare costs.
Parents on Universal Credit are set to benefit from new changes to childcare costs
During the Spring Budget on Wednesday, Chancellor Jeremy Hunt will announce that the government will start paying childcare costs up front for those on Universal Credit.
The maximum amount of cash parents can claim for childcare will also be increased by hundreds of pounds – although the exact figure hasn’t been revealed yet.
Struggling mums and dads will be better off in a year under the plans, making it easier for them to go back to work.
It’s a major win for HOAR’s Make Universal Credit Work campaign, which has been calling for childcare support to be paid upfront and remove the barrier stopping parents from getting back to work since December 2018.
Currently, parents on Universal Credit can claim back 85% of their childcare costs – but they have to pay upfront first.
The maximum cap for claims per month has remained unchanged for 18 years at £646 for one child and £1,108 for two.
It means parents may have to find more than £1,000 for a month’s nursery care in advance before getting any support.
These unfair and expensive childcare costs mean three quarters of mums say it no longer makes financial sense to work, new research has found.
HOAR previously spoke to mum-of-two Freya Macfarlane who was desperate to work, but couldn’t because taking a job would mean she had to foot an £800 childcare bill upfront.
While, working mum Gemma Widdowfield called the rules “nonsense” after they wiped out her £1,000 savings and left her thousands of pounds in debt.
She told HOAR: “The UC rules left me with no wiggle room so I wiped out my savings paying for childcare upfront.”
The new government plans have been welcomed by charities who had previously warned of parents falling into debt due to the childcare system.
Dan Paskins of Save the Children said: “The UK Government has made the right decision in deciding to pay childcare fees for those on Universal Credit upfront rather than in arrears.
“This system was stopping people getting into work and putting people into debt.
“This is good for families, good for our economy and most of all, good news for children.”
Under the plans set to be announced on Wednesday, benefit claimants will be asked to attend more work coach meetings and attend skills bootcamps to help them get back to work.
The Chancellor’s “back to work” plan will also aim to get more over-50s in employment, as well as people with disabilities and long-term illnesses.
Speaking ahead of the Budget, Mr Hunt said: “For many people, there are barriers preventing them from moving into work – lack of skills, a disability or health condition, or having been out of the jobs market for an extended period of time.
“I want this back-to-work Budget to break down these barriers and help people find jobs that are right for them.”
Wednesday’s announcement is set to reveal more changes for hard-up Brits who are struggling due to the rising cost of living.
We’ve rounded up everything we know so far about what could be announced including energy bill help and further support.
Meanwhile, for all the help available to parents see our story.
Plus, here are 12 freebies for Universal Credit claimants worth over £8,000.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
