Families on Universal Credit to get more help with childcare costs from June

The amount of childcare costs families on benefits can claim back will increase by hundreds of pounds within weeks.

The increase kicks in at the end of June, and is driven by the government’s plans to tackle inactivity and help grow the economy.

The Department for Work and Pensions (DWP) is set to raise the amount on June 28, meaning parents eligible for help through Universal Credit will be able to claim back up to £951 for one child and £1,630 for two or more children.

This is a rise of 47% from the previous limits of £646 for one child or £1,108 for two or more children.

The government will also support eligible parents with their first month of childcare costs when they either enter work or increase their hours, by providing childcare funding upfront.

Those parents will receive up to 85% of their childcare costs back before their next month’s bills are due.

The changes were announced as part of Chancellor Jeremy Hunt's Budget in March, when he unveiled a benefits shakeup amid the cost of living crisis.

Work and Pensions Secretary Mel Stride said: “These changes will help thousands of parents progress their career without compromising the quality of the care that their children receive.

“By helping more parents to re-enter and progress in work, we will be able to cut inactivity and help grow the economy.”

The Department for Education will launch a consultation on Wednesday aimed at increasing the early years’ workforce in England.

A recruitment campaign to attract and retain talent is also planned for early next year, which will consider how to introduce new accelerated apprenticeship and degree apprenticeship routes.

Minister for children and families Claire Coutinho insisted childcare shouldn’t be a “barrier to work”, adding: “But the expense has previously meant parents have had to choose between working or looking after their child.

“We are supporting families with the largest ever expansion of free childcare, making sure that places will be available for parents who need them. This will save a working parent using 30 hours a week an average of £6,500.

“We have already announced plans to boost the amount Government pays childcare providers, and now we’re knocking down barriers to recruiting and retaining the talented staff that provide such wonderful care for our children.”

Labour shadow education minister Helen Hayes said: “The Conservatives are piling pressure on a broken system. Their plans come with no plan to increase the workforce, who are so critical to delivering an expansion of childcare.

“What parents and children both need is higher standards, better availability across our country, and a flexible system that supports families from the end of parental leave to the end of primary school.

“Labour has set out clear plans for fully funded breakfast clubs for every child in every primary school in England which can be delivered and will not leave parents scrambling to find provision.”

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