Universal Credit rules to be changed to allow payment of upfront childcare costs

Communities Minister Deirdre Hargey has announced the Executive’s approval to her request for amendments to Universal Credit (UC) regulations in Northern Ireland which will pave the way for the payment of upfront childcare costs for those entering employment. This is a welcome development for parents, and the payment of upfront childcare costs, which can be a barrier to moving into employment, is an issue we have been highlighting for a long time.

Work is now being taken forward which will see the introduction – from October – of a non-repayable grant of up to £1,500, to cover upfront childcare costs, paid in advance directly to a registered childcare provider.

Key information:

  • Non-repayable grant of up to £1,500 for eligible claimants who are entering employment
  • This will be part of the expanded Adviser Discretion Fund (ADF) and awards will be included within the maximum £1,500 limit payable for ADF in a 12 month period
  • The grant will be paid directly to the registered childcare provider
  • Expected to be introduced from October 2021.

Importantly, this payment of upfront childcare costs, paid through the ADF, is included in the Universal Credit assessment when calculating the childcare costs element. Treating the payment in this way is an essential part of helping to ensure that parents can confidently move into, and remain in, employment without the fear of falling into debt in order to pay in advance for the second and subsequent months of childcare.

Making the announcement, the Minister said:

“Many people do not have the resources to pay upfront childcare costs which most childcare providers require. For women, lone parents and low income families especially, this can act as a major barrier to employment. In order to address this, I will be making help available through a non-repayable grant of up to £1,500.

“It is widely recognised that childcare is critical in helping parents into work and moving families out of poverty. Affordable, flexible and accessible childcare allows parents to access work, improve their workplace skills and employability, or continue to be economically active. The provision of upfront childcare costs is part of my wider response to the impact of Covid-19 on the labour market, which ensures that those who have been most impacted by the pandemic get the support they need to return or move into employment as soon as possible.”

In the meantime, the Adviser Discretion Fund (ADF) may be available in some circumstances to assist individuals with childcare costs to remove a barrier to moving towards, obtaining, retaining or progressing within employment or self-employment, for example:

  • Where childcare is required in order to attend a training event that is considered as removing a barrier towards and into work, and the training provider does not cover such costs. Evidence of the training course will need to be provided.
  • Where childcare is required in order to prepare for or attend a job interview. Evidence of a job interview will be required.

This will need to be discussed on a case by case basis with your Universal Credit Work Coach.

For further information

If you wish to find out more about Universal Credit and what financial support you may be entitled to with the cost of childcare, contact our Family Benefits Advice Service for free, impartial and confidential advice on 028 9267 8200 or email hello@employersforchildcare.org.