Using cases from our Early Warning System, this submission to the Work and Pensions Select Committee highlights issues parents face in claiming childcare costs through universal credit. One of the biggest issues is the fact that families have to pay for childcare upfront and wait weeks - or sometimes months for reimbursement. This can cause financial difficulty and in some cases makes taking up a job impossible. Strict and complicated rules around reporting costs also mean that some families inadvertently lose out on support. For some families the proportion of childcare costs they can claim through universal credit has in fact fallen compared with the legacy system.
CPAG recommends that the percentage of childcare costs payable through universal credit be increased, that the ceiling on payments be raised reflecting the rise in childcare costs in the last decade, and that the strict rules around reporting and payment of childcare costs be relaxed to allow more parents to benefit from this support. Parents also need better access to help meeting the upfront costs of childcare, e.g. through the Flexible Support Fund, and better information about how the childcare element will be calculated and paid.