The UK government, through the Department for Work and Pensions (DWP), is unveiling a strategic financial boost for working parents receiving Universal Credit in the face of escalating childcare costs. The support is intended to alleviate the daunting cost of childcare, thereby encouraging more parents to enter or remain in the workforce.
Appreciable Boost to Childcare Benefits
Starting this week, all eligible parents will be able to claim up to £1,015 a month towards the cost of childcare for one child, an increase of £65. The amount for two or more children will rise to £1,739 a month, an increase of £109. Together with improved childcare support, the total annual amount awarded to some families could now reach £20,872.
Childcare costs have risen by around 60% over the last decade, far outstripping the rate of inflation for other goods and services. DWP's enhanced payments are part of a wider strategy to tackle the impact of these rising costs on working families.
One new initiative is to extend the 15 hours of free childcare to children under the age of two for the first time. This measure led to an increase of 150,000 registrations in crèches in April.
Work and Pensions Secretary Mel Stride lauded the update, stating:
This considerable boost to childcare support will assist more parents to step into the world of work and secure long-term financial stability. We are delivering on our plan to get people into jobs, as we cut taxes, drive down inflation, and put money back into the pockets of hardworking families.
Now, up to 85% of the cost of your child's care is covered by the DWP for those on Universal Credit. Since last summer, the amount has increased by £368 for parents of one child and £631 for parents of two or more children.
The government has invested £100 million worth of capital to create the nursery places needed to accommodate the extra children who qualify each year. When fully commissioned, it will provide up to 30 hours of free childcare a week for many working parents, from the end of their maternity leave until their child starts school.
Combined Benefits for Parents on Universal Credit
According to the DWP, once all the benefits are combined, some parents on Universal Credit could receive as much as £20,872 a year. Higher-income families are also set to see an increase in government support this year, due to changes to the High Income Child Benefit Charge, which will see some middle-income families receive an extra £1,260.
The threshold for the levy to apply was raised to £60,000, with a tapering payment up to a combined family income of £80,000. That means more families can get childcare.
Child benefit is payable to those caring for a child under the age of 16, or under the age of 20 if the child is in approved education or training. However, only one individual can claim child benefit for any given child, and there is no limit to the number of children for whom you can claim benefit.
The rate of child benefit is higher for the first child and lower for subsequent children. It is usually paid once every four weeks, on a Monday or Tuesday.