The Department for Work and Pensions (DWP) has announced the maximum amount parents receiving universal credit can claim back for childcare fees will rise to £951 a month for one child and £1,630 for two or more children.
This is an increase of 47 per cent from the current rates of up to £646 for one child and £1,108 for two or more children a month.
The National Day Nurseries Association (NDNA) said that the updated threshold figures are long overdue, but warned they need to continue to 'reflect rising costs of delivering childcare places or parents and providers will end up paying the price.'
As previously announced in the 2023 Budget, parents on universal credit will also be able to claim childcare costs upfront should they enter employment or ‘significantly’ increase their working hours.
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Read more on Budget 2023 here
Currently people in England, Scotland and Wales who are eligible for support pay childcare costs upfront and then claim a refund.
Those eligible for support will now be able to claim up to 85 per cent of their childcare costs back before their next month’s fees are due, the DWP said.
The rise to the childcare element of universal credit and ability to claim costs upfront will come into effect from 28 June.
Mel Stride, work and pensions minister, said, ‘These changes will help thousands of parents progress their career without compromising the quality of the care that their children receive.
‘By helping more parents to re-enter and progress in work, we will be able to cut inactivity and help grow the economy.’
The announcement from the DWP also included action to increase the early years workforce and make the EYFS ‘more practical’. A consultation on the proposed ways to achieve this has been launched by the Department for Education today.