The Department is fully committed to supporting parents with moving into work and improving their earnings once employed. Universal Credit (UC) childcare costs provides more generous childcare support than was available under Tax Credits, reimbursing up to 85% of eligible childcare costs up to a monthly cap as opposed to 70% under tax credits.
UC childcare aligns with the wider government childcare offer. This includes the free childcare offer which provides 15 hours a week of free childcare in England for all 3 and 4 year olds and disadvantaged 2 year olds, doubling for working parents of 3 and 4 year olds to 30 hours a week. The UC childcare cost element can be used to top up a claimant’s eligible free childcare hours if more hours are worked and childcare is required. This means that reasonable childcare costs should not form a barrier to work.