Working parents to benefit from childcare boost worth up to £1,630 per month

Many parents will get help from DWP immediately with their first bill – instead of in arrears – to help them manage their budgets

Low-earning parents on Universal Credit are set to benefit from up to a £522 monthly boost to cover childcare costs – making it easier for them to get back to work or increase their hours.

The Department for Work and Pensions (DWP) has raised how much parents on Universal Credit can claim for childcare – up to £951 a month for one child and £1,630 for two or more children. This is an increase of 47% from the previous limits, which were £646 for one child or £1,108 for two or more children.

The government is also helping eligible parents cover the costs for the first month of childcare when they enter work or increase their hours.

Those parents will now receive up to 85% of those childcare costs back before their next month’s bills are due – meaning they should have money to pay one month in advance going forward. Until now, many low-income families struggled with upfront childcare bills, making it harder for them to work.

Mel Stride, Secretary of State for Work and Pensions, said: “We are supporting thousands of parents to return to work, progress their careers and boost their finances while making sure they have affordable childcare.

“By removing one of the biggest barriers to work for parents in Britain we are giving families the chance of a better future while doubling down on this government’s pledge to grow the economy and bear down on inflation.”

With over two million parents on Universal Credit, the government is targeting ways to improve support and empower them to do their bit and help fill the million vacancies across the country.

As part of the biggest changes to childcare ever made, the government is also seeking to boost the early years workforce, and is now consulting on ways to encourage more people to consider childcare as a career, like through new apprenticeship routes.

In addition, the hourly rates paid to providers to deliver the government’s free childcare offer for two-year-olds will increase by 30% in September, up to an average rate of £8.

While from April 2024 there will be 15 free hours childcare available for working parents of two-year-olds, followed by 15 free hours from nine months in September 2024, and finally 30 free hours from nine months to the start of school from September 2025.

Minister for Children, Families and Wellbeing Claire Coutinho said: “We are delivering the largest ever expansion of free early education in England to make sure parents are able to access the high-quality, affordable childcare that they need.

“A working parent using 30 hours of childcare a week could save an average of £6,500 a year thanks to the new free hours offer alone.

“Parents might be surprised just how much support they’re eligible for – check all the details on our dedicated Childcare Choices website.”