Labour calls for budget fix to help working parents hit by huge childcare costs

Parents on Universal Credit are having to pay large amounts of money for childcare long before they can claim back financial support from the government, and this is pushing many families into debt. Labour is calling for the Government to announce a change in how this support is provided in the budget on Wednesday so that parents don’t have to pay upfront for childcare costs.

This follows news over the weekend that Nichola Salvato, a single mother who is taking the Department for Work and Pensions after being forced into debt by the policy, has been granted a judicial review on the grounds that the current system discriminates against women. This case is expected to be heard in the High Court later on this year.

Tulip Siddiq MP, Labour’s Shadow Minister for Early Years, said:

“It is shocking that parents on low incomes are being forced to stump up huge sums for childcare, waiting at least a month for the support they are entitled to. We know from many heart-breaking cases that this is driving families into poverty and debt.

“Childcare costs have soared under the Tories, so it is more important than ever that parents can access the childcare they need without falling in to debt. The Government must urgently fix this dangerous flaw in Universal Credit.  

“By fixing this problem in the budget on Wednesday, Ministers could help millions of working families and avoid the humiliation of defending this appalling policy in the High Court.”

Whilst parents on Universal Credit can claim up to 85% of monthly childcare costs up to £646, they must pay childcare providers up-front and only receive money back to cover this in arrears if they put in a claim.

A number of children’s charities have been campaigning to change the system so that financial support for childcare costs through Universal Credit are paid directly to the provider. Save the Children and Gingerbread are supporting Nichola Salvato’s judicial review of the policy.