What is the Advisor Discretion Fund?

The Advisor Discretion Fund may help parents in Northern Ireland who are claiming Universal Credit or other income-based benefits with paying for upfront childcare costs, to help them move into employment, increase their hours of work or return from parental leave. Parents in these situations are often prevented from taking up work by having to pay for the childcare they need before they have received their first salary. The Advisor Discretion Fund can help with a non-repayable grant to cover upfront childcare costs that are a barrier to a parent moving into work or taking on more hours.

The current Universal Credit system requires a parent to pay their registered childcare costs upfront, and then receive a portion of these costs reimbursed through Universal Credit. This can take up to six weeks, by which time the parent may have had to find more money to make another payment to the childcare provider for subsequent childcare costs, which are often paid monthly, in advance, at the start of the month.

This can mean that, for some parents, moving into employment is simply not possible without going into debt or using up any savings they may have built up. This barrier to employment has been recognised by the Government and eligible parents can claim help with upfront childcare costs in the form of a non-repayable grant through the Adviser Discretion Fund (ADF).

Not only can eligible parents receive support through the ADF for upfront childcare costs, the regulations also mean that the upfront costs can still be used to calculate the parent’s Universal Credit entitlement, as though the parent had paid them themselves. This will help to ensure that they have sufficient resources to pay for subsequent months of childcare in advance before claiming those costs in arrears from Universal Credit.

Adviser Discretion Fund for upfront childcare costs

Eligible parents who are in receipt of, or moving onto, Universal Credit, or who are on another income based benefit, can apply for support through the ADF to cover initial upfront childcare costs that are a barrier to:

  • moving into employment
  • significantly increasing their hours of work
  • returning to work from a period of parental leave eg maternity leave.

Key points:

  • This is a non-repayable grant for upfront childcare costs of up to £1,500
  • The money will be paid directly to a registered childcare provider only
  • A receipt for the upfront childcare costs paid through the ADF can also be submitted for the purposes of calculating the parent’s Universal Credit entitlement (if applicable).

For more information on the Advisor Discretion Fund, and how to apply, download our factsheet here.

Summary: step by step guide for parents

  1. Request ADF support for childcare: Inform your work coach that upfront childcare costs are a barrier to moving into work or increasing your hours of work – provide evidence of the childcare that you require and the costs you have been quoted.
  2. Complete application forms: Complete forms AD1 and AD5 (provided by your work coach) and ask your childcare provider to complete the relevant information on the AD5 form. Return the AD5 form directly to the Jobs and Benefits office.
  3. Childcare provider is paid enabling child to attend: Childcare provider will receive payment directly from the Jobs and Benefits Office enabling your child(ren) to take up their place.
  4. Upload your receipt to your UC journal (if applicable): You will receive a receipt (AD7) from the Jobs and Benefits Office. Upload this receipt to your UC journal as proof of your childcare costs, if you are a Universal Credit claimant.

We are here to help

This is complex information for Universal Credit claimants. It is important to note that, aside from payments made through the ADF, there is no overall change to how parents receive support with their registered childcare costs through Universal Credit. In general, parents will still be expected to pay their fees to the provider, and submit their receipts to Universal Credit in order to receive support.

If you are considering returning to employment and would like further advice on how this may affect your entitlement to any benefits or help with childcare costs, or wish to find out more about what financial support you may be entitled to, contact our Family Benefits Advice Service for free, impartial and confidential advice. Call us on 028 9267 8200 or email hello@employersforchildcare.org – we are here to help.