Increase in childcare support for those claiming Universal Credit
Following an increase in the support available, Universal Credit may now be the best form of support with childcare costs for more families.
Most working parents are eligible for some form of support towards their childcare costs, yet many don’t realise this and are missing out on the financial help that’s available. In particular, lots of families aren’t aware that they could be claiming Universal Credit or Tax-Free Childcare, either of which could save them £1,000s on their childcare bill, depending on their situation.
Universal Credit – what has changed?
Universal Credit has increased the amount of registered childcare costs that can be included in the support it gives to families. Since this increase was implemented our Family Benefits Advisors have seen an increase in the number of families who are better off on Universal Credit compared to any of the other forms of support for registered childcare costs.
Through Universal Credit families can claim back up to 85% of their registered childcare costs. The maximum childcare costs allowed for Universal Credit are now:
- £1,118 per month for 1 child, parents can claim back £950.92 per month
- £1,917 per month for 2 or more children, parents can claim back £1,630.15 per month
This is a vital form of support for working parents who have seen their childcare bills significantly rise in recent years.
Universal Credit takes into account savings as well as household income, so not all families will be eligible. For those that aren’t, Tax-Free Childcare may be an option.
What is Tax-Free Childcare?
Through Tax-Free Childcare eligible working families can get 20% of their registered childcare costs paid by the Government, up to a maximum of £2,000 per year per child – or £500 each quarter. Families can save up to £10,000 per child per year through Tax-Free Childcare.
To be eligible, both parents need to be in employment or self-employment (one parent in a single parent household), earning between £167 per week (equivalent to 16 hours working at the National Living Wage) and £100,000 per year each. Savings are not considered when determining if a parent is eligible for Tax-Free Childcare.
Ensure your family is accessing all the support you are entitled to
We would encourage all parents to ensure they are receiving all the financial support they are entitled to with their childcare costs, and to check regularly that they are receiving the best form of support for them.
To find out more about what is the best form of financial support towards your childcare costs, contact Employers For Childcare’s Family Benefits Advice Service for free, impartial and confidential advice on Freephone 0800 028 3008 or email email@example.com.