An update on Universal Credit and Tax Credit support for childcare at this time

Universal Credit and Childcare costs

If you are working, claiming Universal Credit, and getting help with childcare costs that you pay for, and correctly report, you will continue to be reimbursed as part of your Universal Credit claim in the normal way.

Where you continue to be employed, including if you have been furloughed by your employer, but due to Covid-19 are not currently using childcare, and your childcare provider is requiring you to pay in order to retain the childcare place, your costs will be reimbursed as long as your childcare restarts in either the current assessment period or one of the following two periods. If your childcare starts after that, then the present situation is that these costs will not be reimbursed.

If you cease to be employed then you will no longer be entitled to claim help towards your childcare costs after the end of the assessment period when you last worked. You should report a change such as this through your online journal.

Tax Credits and Childcare costs

If you cannot work, or have had your working hours reduced due to Covid-19, then Tax Credits will still treat you as working your normal hours until the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme close, so long as you have remained employed or self-employed.

This means that you can also qualify for help towards childcare costs incurred during this time, however you should still inform Tax Credits of any changes in income or childcare costs in the normal way.

The full text of the Government’s advice on this is available here.

If you are not using childcare due to Covid-19, and temporarily have no childcare costs, contact HMRC’s Tax Credits Helpline and inform them of the change.  Tax credits will recalculate your entitlement based on this updated information. You can then contact HMRC when your childcare costs resume as normal and Tax Credits will recalculate to reflect this. This change will not close your Tax Credits claim down and will not result in you having to claim Universal Credit. Note, you are not required to inform Tax Credits if the change in your childcare is less than £10 per week.

If you cease to be employed then you will no longer be entitled to claim help towards your childcare costs.

To contact Employers For Childcare’s Family Benefits Advice Service for further guidance in relation to Universal Credit or Tax Credits, or for any other queries relating to childcare or financial support, call 028 9267 8200 or email