Budget 2023: Universal Credit claimants to get more childcare help

Parents claiming Universal Credit are to get more help with childcare costs under Government plans to encourage people back into work.

The Chancellor will announce in his Budget on Wednesday that the Government will start paying childcare costs up front for those on the benefit.

Charities have warned that the current system of paying and demanding a repayment risks people going into debt.

Jeremy Hunt says the budget aims to put the country on the path to growth.

Currently, people in England, Scotland and Wales who are eligible for current support pay childcare costs up front and then claim a refund.

But the grant has also been frozen at £646 a month per child for several years, meaning it has not kept pace with rising care costs.

Hunt is also expected to announce that the maximum amount people can claim for childcare on Universal Credit will be increased by several hundred pounds. A precise figure for the increase has not yet been given.

Under the plans to be announced, claimants will be asked to attend more meetings with job coaches and attend skills bootcamps to help them get back into work.

The government’s “back to work” plan will also aim to get the over 50s into employment, as well as people with disabilities and those on long-term sick leave.

Ahead of the Budget, the chancellor said: “For many people there are barriers preventing them from getting into work – lack of skills, a disability or health condition, or having been out of the workforce for a long period.

“I want this back-to-work budget to break down those barriers and help people find jobs that suit them.

“We need to close skills gaps and give people the skills, support and incentives they need to get into work.”

The average annual cost of full-time childcare in England for a child under two was more than £14,000 in 2022, according to children’s charity Coram.

This means childcare costs in the UK are among the most expensive in the world, according to the Organization for Economic Co-operation and Development (OECD) – taking up almost 30% of the income of a couple with two young children.

And a survey of 24,000 parents published this month by campaign group Pregnant Then Screwed found that 76% of mothers who pay for childcare feel it no longer makes financial sense for them to work, according to Reuters.

Lauren Fabianski, head of campaigns and communications at Pregnant Then Screwed, added childcare and early years education must be seen as infrastructure.

She said: “Parents cannot work without affordable, good quality childcare. We need to see the Government invest in this to get more women back into the workplace.”

Labour’s shadow work and pensions secretary Jonathan Ashworth said: “Over recent months Labor has outlined welfare reforms to get Britain back to work and now the Tories are following us.”

Last month, the International Monetary Fund (IMF) warned that the UK economy will shrink this year, even though every other major economy will grow.

The Bank of England also predicted a recession in the UK this year – although it is likely to be shorter and less severe than previously predicted.