Universal Credit and childcare costs

Work and Pensions Committee Closed Inquiry
Opened: 25 Nov 2021 Closed: 24 Jul 2023 Parliament page
The Committee looked into how well Universal Credit supports parents with childcare costs. We focussed on: • The requirement for parents to cover childcare costs upfront. • The maximum amounts that the Government will reimburse each month. • How easy it is for parents to get advice about what support … Read more
8 Recommendations
6 Conclusions
1 Report
3 Oral sessions
4 Letters
3 Events
Activity timeline 12 events
31 Mar
2023
Report published
23 Feb
2023
Correspondence
9 Feb
2023
Correspondence
20 Dec
2022
Report published
6 Jul
2022
Correspondence
21 Apr
2022
Correspondence
20 Apr
2022
Oral evidence
20 Apr
2022
Formal meeting (oral evidence session) · The Thatcher Room, Portcullis House
2 Mar
2022
Oral evidence
2 Mar
2022
Formal meeting (oral evidence session) · Room 15, Palace of Westminster
26 Jan
2022
Oral evidence
26 Jan
2022
Formal meeting (oral evidence session) · Room 6, Palace of Westminster
Oral evidence sessions 3 sessions
20 Apr 2022
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Work and Pensions Committee
David Rutley MP · Foreign, Commonwealth & Development Office Donna Ward · Department for Work and Pensions Mims Davies MP · Department for Work and Pensions Neil Couling · Department for Work and Pensions
2 Mar 2022
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Work and Pensions Committee
Annabel Denham · Institute of Economic Affairs Aria Babu · The Entrepreneurs Network Gavin Rice · Centre for Social Justice Gemma Widdowfield Nichola Salvato Vikki Waterman
26 Jan 2022
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Work and Pensions Committee
Ceri Smith · Department for International Trade Charlotte McDonagh · Save the Children UK Dr Rita Griffiths · Institute for Policy Research, University of Bath Helen Donohoe · Professional Association for Childcare and Early Years Jonathan Broadbery · National Day Nurseries Association Oliver Crunden · Citizen’s Advice
Title HC No. Published Items Response
Fourth Report - Universal Credit and childcare costs HC 127 20 Dec 2022 14 Responded
Recommendations & Conclusions
14 results
1 Recommendation Deferred
Fourth Report - Universal Credit a…
The Department is currently exceeding its expected proportion of claimants in receipt of childcare support,...
The Department is currently exceeding its expected proportion of claimants in receipt of childcare support, but it admits that some low-income parents still have difficulty accessing appropriate childcare, for reasons both within and outside its direct control. We recommend the … Read more
Government Response
The Department is reviewing the considerations as to the usefulness of more regular publications of UC childcare data and will keep the committee informed on this decision. Research on 'why take-up isn't higher' has been concluded but is still being quality assured.
Department for Work and Pensions
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2 Recommendation Accepted
Fourth Report - Universal Credit a…
Good quality childcare can have a transformative impact on the lives of children and their...
Good quality childcare can have a transformative impact on the lives of children and their families, and a lack of childcare, or support with paying for it, should never be a barrier to work. Childcare is expensive for all, but … Read more
Government Response
The government is increasing the UC childcare maximum amounts (caps) payable to eligible UC claimants from summer 2023, increasing them to £950.92 for one child and £1,630.15 for two or more children. However, the department does not intend to conduct a specific investigation into the funding schemes of Scotland and Scandinavian countries.
Department for Work and Pensions
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3 Recommendation Acknowledged
Fourth Report - Universal Credit a…
Households claiming Universal Credit are, by definition, amongst the poorest households in the country, yet...
Households claiming Universal Credit are, by definition, amongst the poorest households in the country, yet the childcare support to them via that system requires them to find substantial sums to meet up-front costs: both initially and on an ongoing basis. … Read more
Government Response
The Department works closely with other government departments, especially with DfE to look at ways to support parents back in to work and progress in work. By September 2025, eligible working parents of children aged 9 months to when they start school will be able to access 30 hours of free childcare in England.
Department for Work and Pensions
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4 Conclusion Accepted
Fourth Report - Universal Credit a…
DWP, entirely reasonably, wants to reduce the amount that it loses to fraud via childcare...
DWP, entirely reasonably, wants to reduce the amount that it loses to fraud via childcare payments in UC. However, we have heard that in doing so, by making payments in arrears, it has created an insurmountable barrier to work for … Read more
Government Response
The Department will be making a change to the Universal Credit Regulations 2013 to exempt any FSF payment made to childcare providers from the UC childcare cost calculation, which will allow UC claimants to receive a FSF payment in the usual way. Claimants will then submit evidence of that payment (paid by DWP) to claim back that same set of childcare costs within that same assessment period where the childcare has been delivered.
Department for Work and Pensions
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5 Recommendation Rejected
Fourth Report - Universal Credit a…
We recommend the Government amend the regulations on the use of the Flexible Support Fund...
We recommend the Government amend the regulations on the use of the Flexible Support Fund so that receipts for payments made from the Fund can be submitted as if the parent had paid the childcare costs themselves. This would have … Read more
Government Response
The government will not amend regulations on the use of the Flexible Support Fund, stating that it would not want to risk introducing a reporting system to such a granular level of detail that may drive undesirable behaviour across Jobcentres.
Department for Work and Pensions
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6 Conclusion Acknowledged
Fourth Report - Universal Credit a…
DWP maintains that it does not collect or publish regular statistical updates on uses of...
DWP maintains that it does not collect or publish regular statistical updates on uses of the Flexible Support Fund, on the basis that it does not want to detract from its discretionary nature. The FSF is a core element of … Read more
Government Response
The Government recognises that high childcare costs can be a barrier for parents to take up paid work and is increasing the UC childcare maximum amounts (caps) of childcare costs payable to eligible UC claimants, with a provisional implementation date of summer 2023.
Department for Work and Pensions
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7 Recommendation Not Addressed
Fourth Report - Universal Credit a…
The UC childcare offer is, in some ways, more generous than the system it replaces,...
The UC childcare offer is, in some ways, more generous than the system it replaces, as it offers a higher percentage reimbursement. However, support for childcare for some of the poorest families in the country has failed to keep pace … Read more
Government Response
The response describes work to promote the use of UC childcare and support Work Coaches understanding rather than uprating the childcare cost caps.
Department for Work and Pensions
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8 Conclusion Acknowledged
Fourth Report - Universal Credit a…
There are a wide range of childcare support schemes available to people claiming Universal Credit,...
There are a wide range of childcare support schemes available to people claiming Universal Credit, all with different eligibility criteria and application systems. We heard in this inquiry that it continues to be very difficult for parents to understand what … Read more
Government Response
The government acknowledges the difficulty for parents to understand childcare options, and states that the awareness campaign continues and there is a wide variety of information that covers all the Government childcare offers on the Childcare Choice website. The government does not agree that developing specific calculations on payments for UC childcare would be beneficial.
Department for Work and Pensions
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9 Conclusion Deferred
Fourth Report - Universal Credit a…
The Government offers support on childcare options: notably, the Childcare Choices website and via Jobcentre...
The Government offers support on childcare options: notably, the Childcare Choices website and via Jobcentre Plus Work Coaches. DWP told us that Work Coaches receive training in advising UC claimants on their childcare options, but our evidence suggests further work … Read more
Government Response
The Department states it does not have any jurisdiction to work with childcare providers and therefore, does not intend to consult with providers, as the regulation of childcare lies solely within the DfE remit. The current system of paying childcare costs on receipt of actual costs paid protects the claimant from getting into debt.
Department for Work and Pensions
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10 Recommendation Accepted
Fourth Report - Universal Credit a…
Work Coaches already receive training on childcare support for UC claimants, but given the range...
Work Coaches already receive training on childcare support for UC claimants, but given the range of schemes available, the way that payments and suitable options can change with a claimants’ circumstances, and the need for timely information, there is a … Read more
Government Response
The Department has been promoting the use of UC childcare and the FSF and ensuring guidance is in place and have also put in place Childcare Champions and Subject Matter Experts in regions to support Work Coaches, so they are not considering having Specialist Work Coaches in every Jobcentres.
Department for Work and Pensions
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11 Recommendation Rejected
Fourth Report - Universal Credit a…
The range of childcare support schemes available to parents is complex, and they need access...
The range of childcare support schemes available to parents is complex, and they need access to good quality, timely information to make the best decisions about 48 Universal Credit and childcare costs their finances. We recommend the Department for Work … Read more
Government Response
The Department does not agree with the Committee that developing specific calculations on payments for UC childcare would be beneficial for claimants and feel that it could be misleading.
Department for Work and Pensions
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12 Conclusion Acknowledged
Fourth Report - Universal Credit a…
It is evident that the current system for receiving childcare reimbursements is failing those on...
It is evident that the current system for receiving childcare reimbursements is failing those on Universal Credit, and often leads to further debt and/or compromising circumstances. Variable childcare costs are unfortunately unavoidable due to differing costs during term time and … Read more
Government Response
The government recognizes that high childcare costs can be a real barrier to parents taking up employment or increasing their working hours and shares some of the concerns that the Committee highlights.
Department for Work and Pensions
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13 Recommendation Deferred
Fourth Report - Universal Credit a…
We recommend that the Department for Work and Pensions consult providers on a way that...
We recommend that the Department for Work and Pensions consult providers on a way that costs can be split evenly for people claiming Universal Credit childcare support.
Government Response
The Department for Work and Pensions does not intend to consult with childcare providers, redirecting responsibility to the Department for Education.
Department for Work and Pensions
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14 Conclusion Deferred
Fourth Report - Universal Credit a…
We heard some evidence on how the Department for Work and Pensions could improve or...
We heard some evidence on how the Department for Work and Pensions could improve or alter conditions in the childcare industry. But we recognise that much of the responsibility for childcare policy sits outside DWP, in the Department for Education. … Read more
Government Response
Acknowledges responsibility for childcare policy sits outside DWP, in the Department for Education.
Department for Work and Pensions
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Government Response AI assessment · 14 of 8 classified
Accepted 3
Acknowledged 4
Deferred 4
Not Addressed 1
Rejected 2
Total 8 recs + 6 conclusions
Correspondence 4 letters
23 Feb 2023 Correspondence to Secretary of State relating to the Universal Credit and childcare costs Report
Parliament page
9 Feb 2023 Correspondence from the Minister for Employment on Flexible Support Fund expenditure
Parliament page
6 Jul 2022 Correspondence with the Minister for Welfare Delivery and the Minister for Employment on Universal Credit and childcare costs
Parliament page
21 Apr 2022 Correspondence with the Minister for Welfare Delivery relating to the Universal Credit and childcare costs inquiry
Parliament page