Childcare options that the Government are considering for Universal Credit

The Government has told MPs on the Welfare Reform Committee that they are considering a number of options for childcare support in UC. They are:

Paying 70% of childcare costs to all lone parents and all couples where both parents are in work, up to a limit of £125 (for one child) and £210 (for two children or more) (620,000 families receiving support);

Paying 80% of childcare costs to all lone parents and all couples where both parents are in work, up to a limit of £100 (for one child) and £150 (for two children or more) (620,000 families receiving support);

Using the existing format, paying 70% of costs up to £160 (for one child) and £270 (for two children or more) where both parents are in 16 hours or more of work each (550,000 families receiving support);

The above but excluding lone parents from the hours requirement, with a 70% rate and limits of £150 and £250 (570,000 families receiving support);

Paying childcare costs only if the youngest child is less than 5 years old, at 80% up to £175 and £300 (with 360,000 families receiving support);

And lastly a suggestion of varying cash limits by the age of the youngest child (no figures given apart from that 620,000 families would receive support).

While we haven’t yet modelled the full effects of these options, it’s clear that they have different effects on those needing more or fewer hours of care while maintaining an hours requirement contradicts much of the original thrust of the reforms.

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