If you claim help towards your approved childcare costs through Universal Credit (UC) then your award will include a Childcare Costs Element.
A working UC claimant will only be entitled to a Childcare Costs Element for childcare that is actually received by their child.
If a claimant is working, Universal Credit can help with the costs of certain childcare, no matter how many hours they work. If entitled, a Childcare Costs Element is included when their Maximum Universal Credit figure is assessed.
To be eligible the claimant must ‘pass’: a work condition, a childcare costs condition, a payment condition and a notification condition.
If eligible, the DWP will refund the claimant up to 85% of their childcare costs to a maximum of
- £646.35 per month for one child
- £1108.04 per month for 2 or more children
The Childcare Costs Element is only included if the claimant reports childcare costs paid for within a certain time limit.
Where someone is already claiming Universal Credit, any childcare costs that they have paid and reported, for childcare that has been provided, will be refunded (up to the maximum allowed) when their Universal Credit award is assessed.
Where a claimant pays in advance for childcare, the DWP will only include a Childcare Costs Element in the claimant’s UC award once the childcare has actually taken place.
Workers who have access to childcare during the lockdown will be able to continue to report their childcare costs as normal and so will continue to receive help with these costs by having a Childcare Costs Element included in their UC award.
Other working claimants may well have:
- Paid for childcare in advance, or
- Be paying a retainer to their childcare provider ie a non-refundable payment that reserves a childcare place for future use.
The DWP’s stance is that a Childcare Costs Element can only be included in a UC award where childcare has actually been provided. This means that:
- Where a UC claimant has paid for childcare in advance, but has been unable to receive that childcare due to the lockdown, their UC award cannot include a Childcare Costs Element until the childcare which has already been paid for has been provided (assuming all the other rules are met).
- Retainers are not eligible to be covered.
Tanya works as a shop floor manager in a supermarket. Her daughter, Lilly age 3, continues to attend childcare as normal.
As Tanya is a lone parent, who is paying a registered childcare provider to look after Lilly whilst she is at work, she is entitled to a Childcare Costs Element in her UC award. She must pay and report her childcare costs as normal.
George works in a call centre. He is currently working from home. His son Oliver, age 2, normally attends nursery but at the moment is being looked after by George’s mum (she moved in with him at the start of the lockdown).
As George is a lone parent, who is paying a registered childcare provider to look after Oliver whilst he is at work, he is usually entitled to a Childcare Cost Element in his Universal Credit award. But, during the Coronavirus, Oliver has not been attending nursery - initially because George was not a critical worker, and because because the nursery only has limited spaces and has not offered one to Oliver..
It took George a long time to get Oliver into the nursery he wanted, so when the nursery explained that he would have to pay a retainer to secure the place, he agreed.
George’s Assessment Periods run from 3rd of one month to 2nd of the next. When his UC was assessed on 2nd April it included a Childcare Costs Element in respect of the Childcare provided to Oliver for the period 3rd -18th March. When his UC was assessed on 2nd May, although he had paid a retained for this period, as Oliver has not received any childcare from the nursery no Childcare Costs Element was included in his UC award. His UC award will only include a Childcare Costs Element if the nursery is actually providing Oliver with childcare, and only for childcare that Oliver has received.
for more information about Universal Credit and childcare costs.