Boost to childcare payments marks first step in major expansion
The government has announced that Universal Credit’s maximum childcare payments will rise nearly 50% – up to £1,630 per month – from 28th June.
As part of the expansion to childcare provision announced in the 2023 spring budget, low-income families will be able to access increased childcare support worth a total of £900m from late June.
The Department for Work and Pensions (DWP) will raise the amount that parents in Great Britain can claim back monthly for their childcare costs on Universal Credit up to £951 for one child and £1,630 for two or more children. This is a rise of 47% from the previous limits of £646 for one child or £1,108 for two or more children.
The government will also help eligible parents cover the costs for the first month’s childcare when they enter work or significantly increase their hours.
Those parents will also receive up to 85% of their childcare costs back before their next month’s bills are due – meaning they should have money to pay one month in advance going forward.
Mel Stride, secretary of state for work and pensions, said: “These changes will help thousands of parents progress their career without compromising the quality of the care that their children receive.
“By helping more parents to re-enter and progress in work, we will be able to cut inactivity and help grow the economy.”
To boost the early years workforce, the Department for Education has also launched a consultation in England to relax staffing regulations covering the childcare sector, with reduced requirements for level two qualified staff, and lower barriers to less qualified staff counting within staff-child ratios.
This is alongside a package of measures to enable the government’s expansion of free childcare, with 15 free hours available for working parents of two-year-olds from April 2024, 15 free hours from nine months to the start of school available from September 2024, rising to 30 free hours from September 2025.
From September, the hourly rates paid to providers to deliver free childcare for two-year-olds will increase by 30% from an average rate of £6 to £8.
Minister for children, families and wellbeing Claire Coutinho said: “We are supporting families with the largest ever expansion of free childcare, making sure that places will be available for parents who need them. This will save a working parent using 30 hours a week an average of £6,500.
“We have already announced plans to boost the amount government pays childcare providers, and now we’re knocking down barriers to recruiting and retaining the talented staff that provide such wonderful care for our children.”