Adam Matthews, the Training Manager at Society Matters, delivers a compelling analysis of the key changes the childcare element of Universal Credit. Insights into the present state of childcare in the UK are provided along with key strategies to ensure individuals receive the full extent of the support they rightfully deserve.
What are the Changes to Childcare Support on Universal Credit?
There are some welcome changes for people who need financial support with Childcare when it comes to Universal Credit coming into play on Wednesday 28th June.
The government will allow eligible parents on Universal Credit to claim back up to £951 for childcare costs for one child and up to £1,630 for two or more children. This works out as a significant 47% increase on previous support.
Childcare support on Universal Credit had previously been frozen for several years at up to a maximum of 85% of childcare costs or £646 per month for one child or £1,108 for two or more children. It’s important to note that this increase is only available on Universal Credit and won’t be added to the ‘legacy benefit’ Working Tax Credit ‘childcare element.
The government has also announced it will also support eligible people responsible for children with their first month of childcare costs when they either enter work or increase their hours, by providing childcare funding upfront rather than expecting people to manage the first month’s costs themselves. From speaking to many people this was proving unmanageable for many due to the combination of the cost-of-living crisis and high childcare costs.
Where do we Currently Stand with Childcare in the UK?
It’s quite clear that within the perfect storm of the cost-of-living crisis and high inflation, we have a childcare costs crisis. The UK as of March 2023 was the third-most expensive country for childcare in the world, based on a couple earning the average wage, according to data from the OECD. For a couple with two young children childcare costs take up nearly 30% of their income, according to the OECD. A survey of 24,000 parents, which was published recently by campaign group Pregnant Then Screwed, found 76% of mothers who pay for childcare feel it no longer makes financial sense for them to work.
Childcare costs have increased by a massive 44% since 2010, according to analysis from the Trades Union Congress and have risen by nearly 6 per cent just over the past year. All this has happened whilst the availability of places for Children in the UK has fallen. This means the average annual cost of a full-time nursery place for a child under two in the UK is now a staggering £14,836, according to a report by the charity, Coram. To add to this fewer than one in five (18 per cent) of local authorities in England have enough childcare places for disabled children, down from 21 per cent.
If you compare the UK’s childcare spending support, quality of childcare and length and payments for paternal and maternity leave to other countries it ranks a lowly 36th in a recent report put together by UNICEF.
Why are people underclaiming childcare when costs are so high?
The childcare support available is often underclaimed similarly to other welfare benefits (approx. £19 billion a year) due to a general difficulty in navigating a complex system, a lack of awareness and digital exclusion, stigma, and the increasingly fragmented nature of support from the government.
For example, Policy in Practice estimates £7.5 billion of Universal Credit goes unclaimed by 1.2 million eligible households this year. How many of these households may have been entitled to the childcare element but are not currently getting the support and struggling to manage financially?
There are of course other forms of childcare support available, some of which you cant claim at the same time as the childcare element of Universal Credit including the Tax-Free Childcare for 0-11 Year olds. Add to this the current Free education and childcare for 2-year-olds, the 15 Hours of free childcare for 3 and 4 year olds the 30 hours of free childcare for 3 and 4 year olds and the outgoing Working Tax Credits childcare element and I’m sure you will agree this can become confusing and overwhelming for people responsible for children.
There is further welcome incoming childcare support over the next few years which have been confirmed by the government. Starting from April 2024, existing childcare support will be expanded in phases. By, September 2025, working parents with children aged 9 months old to when they start school will be eligible for 30 hours childcare support. Information on the timescales and level of support can be found here.
How can we make sure people get all the childcare they are entitled to?
It’s really important at the moment to maximise income and to make sure people that are struggling get a full benefit check by using either the benefit calculators such as entitled to or signposting to organisations such as Citizens Advice.
In addition to this I would recommend using the governments childcare calculator, whilst remembering some people will need extra support using the tool.
The Childcare Choices website also gives a good breakdown of all the different types of childcare support in the UK, explains who should be eligible and how to claim and is a useful recourse to send out to people who are struggling to navigate the complex system.
If you’re looking for social solutions, Society Matters cic is your perfect partner. We have a training calendar or workshops we provide with regularity which you can book onto as an individual or employee.
