Universal Credit provides essential financial support to individuals and families in the UK, particularly those who are on low incomes, are jobless or are unable to work. One crucial aspect of this support is childcare funding. In today’s detailed guide, we will delve into the details of free childcare through Universal Credit, explain who is eligible, what funding is available to those who are, how to claim, and more.
What is Universal Credit?
Universal Credit is a Government welfare benefit that was introduced to streamline the support available to eligible individuals and families. Its primary goal is to provide financial assistance to those who need it, taking into account various aspects of an individual or family’s financial situation.
Without getting too bogged down in unnecessary detail here, Universal Credit is thus named because it is replacing several existing benefits, including Income Support, Jobseeker’s Allowance (‘JSA’), Child Tax Credit, and others. Today, however, we’ll focus purely on the childcare funding element.
Who is Eligible for Childcare Funding Through Universal Credit?
Childcare funding through Universal Credit is primarily intended for parents on low incomes who require childcare services to either maintain current employment, increase working hours, or transition into paid work within a month. Eligibility caveats for you — and your partner if you have one — include the following:
- Except for a few exceptions, you usually both have to be in paid work, or have an offer of paid work for a position starting within a month.
- Earnings and income must fall within specific thresholds to qualify.
- The childcare provider you use must be officially registered/approved by OFSTED or equivalent.
- You must be living in the UK.
- You must be 18 or over, although there are exceptions for some aged 16 or 17.
- You should be below State Pension age.
- You must jointly have no more than £16k in savings or investments.
- The child(ren) for whom you are applying must be below the age of 17 (eligibility ends at the end of the August following their 16th birthday).
How Much Childcare Funding Can You Get Through Universal Credit?
The amount of childcare funding available through Universal Credit varies according to your individual circumstances. Generally speaking, though, Universal Credit can cover up to 85% of your childcare costs as follows:
• The maximum available for one child is £950.92 per month;
• The maximum available for 2 or more is £1,630.15 per month.
(Correct at date of publishing, late September 2023).
What Can the Childcare Funding be Used For?
Universal Credit childcare funding can be used for various childcare services, so long as they’re properly registered (e.g. with OFSTED or their equivalent in Wales and Scotland). Permitted types of childcare provision include:
- Nurseries: Licensed nurseries that provide care and early education for young children.
- Childminders: Individuals registered to provide childcare services in their homes.
- After-School Clubs: Organised programmes that offer care and activities for school-age children after school hours.
- Holiday Clubs: Similar to after-school clubs but available during school holidays.
- Preschools: Educational settings for children aged up to 5.
- Approved Childcare Providers: Some approved providers outside traditional settings may also be eligible for funding.
As well as funding standard nursery/preschool-type childcare sessions that allow you to work, the funding can also be used for other types of childcare provision that will help you transition back into work. It can potentially fund settling-in sessions before work to help your child transition into a new childcare setting, childcare provision for your child while you commute to your job, childcare required because of changing work patterns as part of a zero-hours contract, and childcare provision during the month following the loss of a job.
You can claim Universal Credit for Childcare at the same time as:
You cannot claim Universal Credit for Childcare at the same time as:
• Tax credits
• Tax-Free Childcare
How to Claim Your Childcare Costs Via Universal Credit
Except in special circumstances, you will need to pay for your childcare up front and then claim back the eligible part of it through the scheme. To successfully make your claim, you’ll typically need to:
- Keep records of your childcare provider’s registration number and contact details.
- Document your childcare costs with receipts or invoices.
- Provide evidence of your work or job offers.
- Claim within 2 months (latest) of incurring the childcare costs otherwise you may miss out.
- Regularly update the Universal Credit system with any changes in your childcare situation.
- To get started, apply for your online Universal Credits account here.
Nursery Places at Leaps & Bounds Day Nursery, Edgbaston, Birmingham
At Leaps & Bounds Day Nursery in Edgbaston, we support all Government-funded childcare schemes so, even if you don’t qualify for free childcare support through Universal Credit, you may qualify for one or more of the alternative childcare funding schemes. These are there to help families with affordability, which nowadays is more important than ever. Leaps & Bounds Day Nursery offers a first-class childcare and early education service for babies, toddlers and preschoolers under five, offering them the very best start in life in a warm, nurturing environment. If you would like to explore the possibility of your child having a place at Leaps & Bounds, please do get in touch using one of the following options:
Rated as a Good Provider of childcare and early education by OFSTED, Leaps and Bounds is a nursery/preschool located in Edgbaston, near Birmingham, Ladywood, Bearwood, Harborne and Smethwick. We also operate our own Forest School, enabling children to benefit from everything that nature has to offer.
Information in this guide is given in good faith and is believed to be correct at the time of writing (late September 2023). Please check the Government website for the most up-to-date information.