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NEWS: Work and Pensions Committee publishes latest report into Universal Credit and childcare

Today (20 December 2022) the Work and Pensions Committee has published its latest report into Universal Credit and childcare costs.

PACEY has been supporting the Work and Pensions Committee with its inquiry into Universal Credit (UC) and childcare, with PACEY’s Policy Advisor Helen Donohoe providing oral and written evidence earlier this year.

The report sets out the challenges facing Universal Credit claimants in accessing early education and childcare provision to work, and outlines recommendations to improve the system:

  • The Committee calls for the reimbursement cap (which has been frozen for 6 years and only covers parents for part-time work) to be increased to reflect the true cost of provision and support UC claimants to increase their working hours
  • It also calls for a change to the current ‘upfront payment’ approach which leaves many claimants waiting weeks for reimbursement, often taking on debt or turning down work in the meantime. While some registered providers offer alternative payment mechanisms, the Committee recognises that it should not fall on providers to have to do this - instead Government should bring forward proposals on ways to more evenly spread costs for claimants
  • The Committee recommends further Government research into the low take-up of the childcare element of UC (only 13% of eligible households claimed in February 2022) and more support for parents to understand what they are eligible and how to go about accessing it.

Read the report in full

Liz Bayram, Chief Executive at PACEY comments:

“PACEY believes it is wrong that so many parents on Universal Credit are not supported to access the childcare they need to start work or increase their working hours. Disappointingly, the Government won its recent appeal against the High Court legal challenge around childcare payments supported by PACEY and others which originally ruled the “proof of payment” requirement is discriminatory on working parents.

“We hope the Work and Pensions Committee report will shine a spotlight on how short-sighted the Department for Work and Pensions has been in being unwilling to change its approach. We will continue to work with partners to push for the changes to facilitate a fairer process that prevents families from entering a ‘cycle of debt’ in order to access employment or training. All parents want to do is be able to work so they can lift their family out of poverty.”