Childminding UK’s Sustainability report 2023/24, highlights how receiving funding in lump sums can affect Universal Credit payments by increasing the amount a childminder appears to earn during a reporting window to above the maximum income threshold. In some cases, this means they miss out on the benefit the months they receive funding or until their funding runs out.
One childminder explained, ‘I am extremely worried. I am a single parent minder with two assistants. I have just moved from Tax Credits to Universal Credit. Our funding is paid in two lump sums per term, rather than monthly. Funded months will wipe out my UC completely, even though the funding covers just two-three months of expenditure.’
Another said, ‘With Birmingham City Council only paying termly for funding, I financially cannot afford to offer more than one space as the bulk payment effects my UC payments, leaving me short in money to pay essential bills.’
A third childminder explained, ‘I am a single mother soon to be transferred to UC. Being paid a lump sum once a term will wipe out any payments I should receive through the benefit, plunging me into real poverty. Unless Hertforshire agrees to monthly payments, I will have no choice but to close my business.’
Another said, ‘As s childminder on UC – I am a widow with three small children – getting paid funding six times a year is difficult. I have to pay my bills weekly, including my heating bill which I cannot claim expenses for, and I can’t claim the benefit until the funding I’ve received runs out. This is forcing me to consider giving this job up.’
A Government spokesperson said, ‘We're taking action to increase the number of childminders, supporting thousands of people to join the sector with the childminder start-up grant and removing unnecessary training costs.
‘The Universal Credit system recognises that the earnings of self-employed people – including childminders – can fluctuate. Income levels are taken into account on a monthly basis to ensure benefit payments are maintained at a fair and continuous level.’
The report, which is based upon a survey of 424 childminders, also found that 60 per cent of respondents are worried about the sustainability of their setting when the expanded hours come in, this is due to a low hourly rate or receiving funding termly and not monthly from their local authority.