Delivery of support for childcare costs under universal credit

This briefing examines childcare costs under universal credit.

Every large system will create problems for some individuals. However our experience of how benefits are delivered leads us to believe there are too many fault lines in the proposed system to deliver support for childcare costs under universal credit.

Under current regulations childcare costs will be paid in arrears so the claimant who needs to pay for formal childcare in order to work may be forced into debt as a result of moving into work. If their childcare costs rise because of higher charges in holidays they will have to take on further debt. Any problems reporting their costs could mean they sustain a very significant loss.

Claimants needing childcare to move into work are likely to find that the financial risks of doing so are greater than in the current system.

Delivery of support for childcare costs under Universal Credit [ 79 kb]