Your childcare options with universal credit

What Universal Credit means for you

Over the next few years tax credits will gradually be replaced by universal credit. You will be notified in advance when the time comes for you to move from tax credits onto universal credit.

If you’re recieving universal credit, or want to know more about how to use universal credit to pay for childcare, read our detailed guidance below.

How much you can claim

The amount you’ll receive depends on how much you earn from paid work, how much your childcare costs each month and how many children you have. If the amount of childcare you use changes so does the payment you receive.

Types of childcare you can claim for

Your childcare provider must be a registered childcare provider. A registered childcare provider will be able to give you their childcare registration number and the other information that you’ll be asked to provide when you claim the childcare element.

You can use other schemes together with universal credit

If your child is between 2 and 5 years old there are other childcare schemes that you can use at the same time as claiming childcare costs under universal credit. These schemes depend on the age of your child. We’ve explained below how you can use universal credit together with other schemes.

Record your expenses to get payment

To get the payment you need to record your childcare expenses in your online journal and provide proof of payment such as your invoices and receipts from your childcare provider. Your work coach should tell you how to do this, or you can submit a question in your online journal. You will usually receive your childcare payment in the month after you have paid for your childcare.

Keep up to date

It’s very important to keep your online journal up to date with your childcare expenses, and to send in any evidence you are asked to provide on time.

When you’ll be paid

The money is paid along with the rest of your universal payment each month, so you will get your childcare element payment in the month after you have paid and recorded your childcare expenses.

Select the option below that applies to you for more detailed information – and worked examples of childcare hours and costs.

My child is under two years old

You can claim up to 85% of your childcare costs through universal credit if you’re working or about to start work. For one child the maximum monthly amount you can claim is £646.35.

If you have two or more children, the maximum monthly amount you can claim is £1108.04

To claim childcare costs, speak to your work coach or call the universal credit helpline on 0800 328 5644 Monday to Friday, 8am to 6pm (closed on bank holidays).

You can also contact your work coach through your universal credit online journal.

Example

Anita has been on maternity leave and is claiming universal credit. Her baby Kira is six months old and Anita has been told there is a place available in her local nursery. Anita is going back to work, and will be working 3 days per week.

Anita tells her work coach she will be going back to work next month. Her work coach tells her how to claim the childcare element of universal credit, and gives her details of where to send her invoices and reciepts from the nursery. Kira will be at nursery for 3 full days per week.

Anita’s nursery bill is £492 per month. Anita pays this and then claims 85% back through the childcare element of universal credit each month. She receives £418.20 ‘childcare element’ in her universal credit the month after she pays her nursery bill. She uses her wages to pay for the other 15% that isn’t covered by universal credit – this means she pays £73.80 each month to the nursery out of her wages.

Note: Anita will be able to claim other types of support as well as universal credit when Kira is 2 or 3, depending on her circumstances.

My child is between 2 and 3 years old

If your child is 2 years old you can use a mixture of free childcare schemes and universal credit childcare costs payments to pay for your childcare.

Free childcare schemes

If you live in England and are receiving universal credit and your child is 2 years old you can recieve 15 hours of childcare per week during term time. This is available if your income is no more than £15,400 per year. You will not be eligible if your income is higher than £15,400.

You do not have to pay for this childcare. You can receive this childcare whether or not you are working.

Read more about this scheme here.

To apply for this scheme contact your local council

In Wales there is a free childcare scheme called Flying Start. Check whether you are eligible here.

If you’re working and get universal credit

If you’re working you can claim up to 85% of your childcare costs in universal credit.

The maximum monthly amount you can claim is £646.35.

If you have two or more children, the maximum monthly amount you can claim is £1108.04.

To claim childcare costs through universal credit, speak to your work coach or call the universal credit helpline on 0800 328 5644 Monday to Friday, 8am to 6pm (closed on bank holidays).

You can also contact your work coach through your universal credit online journal.

 

Example: using free childcare and universal credit payments for childcare costs

Sasha works as a part time painter and decorator for 16 hours per week and earns £160 per week. Her son Joshua goes to a nursery for 25 hours per week and has just turned two years old.

Sasha receives universal credit payments every month as she is on a low income. As she is on universal credit – and her income is below £15,400 – she is able to claim 15 hours per week in term-time by using the free childcare scheme. She pays for the other 10 hours per week by claiming the childcare costs available in universal credit and then paying the rest out of her wages. Her nursery gives her a bill telling her what has been paid for, what is free, and how much she has left over to pay.

Sasha uses her universal credit online journal to record her childcare costs every month. Her work coach has told her which receipts and documents she needs to provide each month during her assessment period. Each of her universal credit payments includes her childcare costs payment along with the rest of her universal credit the following month.

My child is 3 or 4 years old

Once your child is 3 you can use a combination of universal credit and free childcare schemes to pay for childcare.

If your childcare provider participates in the 30 hours term-time free childcare scheme, you will be able to use that scheme to receive 30 hours of free childcare during term-time. If you need more than 30 hours childcare, you can pay for the other childcare hours by claiming universal credit childcare element payments to cover 85% of the costs, up to a maximum monthly amount of £646.35 for one child and £1108.04 if you have two or more children.

You would then pay for the rest from your own income, e.g. your wages.

Example:

Dave is a single dad with twins Bobby and Tanya. They are 3 years old. Dave’s nursery offers 30 hours free childcare during termtime and Dave is claiming universal credit as he is on a low income working as a care assistant. His wages are £120 per week. Dave decides to work more hours per week now the twins are 3 and nursery say they can have full time places at nursery.

Dave needs childcare for 50 hours per week, all year round. This is more than the 30 hours term-time scheme offers, so he needs to top up the hours so his twins can be at nursery full time.

To pay for the childcare he needs during school holidays and the extra hours on top of the 30 hours weekly available in term time he claims the childcare element of universal credit. This covers 85% of the nursery fees that aren’t part of the 30 hours scheme. Dave pays the other 15% using his wages.

Dave’s nursery charges £306 per month for the hours he recieves that aren’t covered by the 30 hours scheme. He pays the bill each month, and then recieves a payment called the childcare element in his universal credit payment each following month. This is £260.10 each month. The final 15% comes to £45.90, which Dave pays from his wages.

What if the nursery doesn’t offer the 30 hours scheme?

Dave’s friend Nicky has a child aged 3 too. Her nursery doesn’t provide the 30 hours free childcare, but has still offered her a full time place, which will allow her to increase her hours at work. Her child is currently at nursery for 15 hours a week during term-time as the nursery does offer 15 hours per week free childcare.

Nicky decides to take the full time place. She’s going to claim the childcare element of universal credit to cover most of the nursery fees. This means Nicky is able to claim 85% of her childcare costs through the childcare element of universal credit.

The nursery calculate her bill to be £530 per month once they have applied the 15 free hours to her bill. Nicky is entitled to receive £450.50 each month as the childcare element payment in her universal credit payment. She will have to pay the remaining £79.50 each month from her wages.

Nicky pays her childcare costs each month, and records her childcare costs each month in her online journal. Her work coach has told her where to send her receipts and other documents from the nursery. After each monthly assessment period Nicky gets her childcare costs payment along with the rest of her universal credit.

 

 

My child is over four and at school

Once your child is at school you may need childcare before and after school, and during school holidays. If you’re working you will be able to claim the childcare element of universal credit to pay for these types of childcare.

If you’re working you can claim up to 85% of your childcare costs in universal credit.

The maximum monthly amount you can claim is £646.35.

If you have two or more children, the maximum monthly amount you can claim is £1108.04.

To claim childcare costs through universal credit, speak to your work coach or call the universal credit helpline on 0800 328 5644 Monday to Friday, 8am to 6pm (closed on bank holidays).

You can also contact your work coach through your universal credit online journal.

Example

Zeynee has two children, Ahmed and Meena. They are 6 and 8 years old. Zeynee works in an office for 25 hours a week. She has a long journey to work, so needs childcare in the mornings and some evenings.

The children have a childminder who is registered with Ofsted. The childminder can also take the children during the holidays, and Zeynee sometimes uses holiday clubs for childcare during the school holidays.

Zeynee is claiming universal credit as she is on a low income and claims the childcare element to cover 85% of her childcare costs, including during the school holidays.

Zeynee’s childcare costs are higher during the summer, as the holiday clubs and the childminder are full time. She records her childcare payments and costs in her online journal each month and sends in her documents such as invoices and receipts using the address given to her by her work coach. She keeps copies and gets a certificate of posting for free from the post office.

Zeynee’s childcare element is paid along with the rest of her universal credit in her next month’s payment. She pays the 15% that isn’t covered by universal credit from her wages.

Zeynee’s childminding bill in termtime is £316 per month. She claims £268.60 of this from universal credit and pays the remaining £47.40 from her wages.

In the school holidays there is a month when her childcren go to a full-time holiday club. This means her childcare costs go up to £1056 for that month. Zeynee records this cost in her journal and provides reciepts as usual. Her childcare element in her universal credit payment next month will be £897.60 and she will need to pay £158.40 from her wages.

What's next?

We'll be updating our information on universal credit as and when the details become available. Do check back from time to time for updates. We will also alert you to new information in our membership newsletter.

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