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Coronavirus: Universal Credit - Help with Childcare Costs
Universal Credit - Help with Childcare Costs

If you claim help towards your approved childcare costs for childcare (to enable you to work) through Universal Credit (UC) then your award will include a Childcare Costs Element.


What are the rules?

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 the childcare costs  they have 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. 

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 had paid for childcare in advance, but was unable to receive that childcare due to the lockdown, their UC award could not include a Childcare Costs Element until the childcare which had already been paid for had 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, attends nursery. 
As George is a lone parent, who is paying a registered childcare provider to look after Oliver whilst he is at work, he is entitled to a Childcare Cost Element in his Universal Credit award. Each month he provides details of the childcare he has paid for and received.

Click here for more information about Universal Credit and childcare costs.

Frequently Asked Questions

My customer is a lone parent on Universal Credit. He is due to start work soon. He will need to pay for childcare, but he is worried because he will not be able to pay for the childcare until he gets his first wage. And I know that a childcare cost element cannot be included in UC until the childcare has been paid for. What can I advise him?

He should speak to his Work Coach. He might be able to get help from the Flexible Support Fund and / or an Advance.

Here is an example of someone in a similar situation:


Violet is a single parent. She has been claiming UC as a job seeker, but she is starting a new job next week. She has arranged a place in the after school club for her children aged 7 and 9.

She has to pay for the first month’s childcare by this Friday, but she does not have any spare money for that. She won’t get paid her first wage until she has worked for one month.

Violet speaks to her Work Coach, who agrees to use the Flexible Support Fund to pay the first month’s fees directly to the after school club, in order to help Violet start her new job.

As the Flexible Support Fund is covering the first month of childcare, Violet will not be able to get a Child Care Costs Element in UC to cover this period of childcare.

The following month, Violet needs to pay again, up front, for the next month’s childcare. She has just received her first wage, but the family needs to live on that and her UC top-up. She cannot afford to pay for the childcare on top of her rent and household bills. It seems like a ‘catch 22’, because she has to pay out for the childcare in order to get 85% of her childcare costs back through her UC – but she cannot afford to do that.

She speaks to her Work Coach, who explains that Violet could get a Budgeting Advance, meaning she could borrow the money to pay for her childcare costs and repay the advance over the next 12 months. Then she can have a childcare costs element included in her UC for the costs she has paid for. And she will be in a better financial position each month to pay for the childcare and then claim 85% back through her UC.