Niki
Working parents on Universal Credit can potentially save up to £1,768 per month on childcare costs. The Department for Work and Pensions (DWP) offers support on registered childcare—including holiday clubs, after‑school clubs, and breakfast clubs—providing up to 85% reimbursement.
But eligibility depends on specific conditions. Here’s a detailed breakdown with facts, figures, and guidance.
How Much Can You Get?
| Number of Children | Monthly Cap | Percentage Covered |
|---|---|---|
| One child | £1,031.88 | Up to 85% |
| Two or more children | £1,768.94 | Up to 85% |
Who Is Eligible?
- Claimant must be on Universal Credit and either working or starting work within the next month.
- If cohabiting, both partners typically must work, unless one is unable to provide care due to a disability or health condition.
- Eligibility also extends to those receiving Statutory Sick Pay, Statutory Maternity/Paternity/Shared Parental/Adoption Pay, Maternity Allowance, or Statutory Neonatal Care Pay.
How It Works
- You pay for childcare upfront.
- Report the cost through your Universal Credit account with required evidence: provider details, dates, amount, proof of payment (invoice, bank statement, etc.).
- DWP reimburses up to 85% during your next assessment period, up to monthly caps.
- You can claim retrospectively within your current or next assessment period. Delays beyond that may forfeit reimbursement.
- Advance payment may be arranged if you’re starting or increasing work hours—proof required, and paid directly to your provider.
Why It Matters
- Cuts childcare costs drastically, making work more affordable.
- Helps parents re-enter or increase work, supporting family finances.
- Updated from April 7, 2025, the caps increased slightly, meaning one-child claims rose to £1,031.88, and two or more to £1,768.94.
Things to Watch Out For
- Provider must be registered (OFSTED in England or equivalent devolved bodies).
- Submit costs promptly—waiting more than two assessment periods can block repayment.
- If earnings rise, your total Universal Credit (and childcare element) may decrease due to the taper rate.
- Overlap with other schemes like tax-free childcare or free funded hours is limited—you can’t use them simultaneously with Universal Credit childcare support.
For eligible working parents, DWP payments through Universal Credit’s childcare element can save up to £1,768 a month, covering 85% of costs.
Act quickly, ensure your provider is registered, and report expenses with accurate documentation for smooth reimbursement. It’s a powerful support tool helping families manage childcare while working.
FAQs
Can I claim childcare costs if I haven’t started a job yet?
Yes—if you’ve accepted a job offer or are starting within the next month, you could be eligible.
What proof do I need to submit childcare costs?
You must provide evidence such as invoices or letters from the provider (including registration details), plus proof of payment like bank statements or receipts.
Can I receive payments in advance if I can’t afford upfront childcare?
Yes—if you’re starting a job or increasing hours, you may qualify for upfront childcare costs paid directly to your provider.