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NEWS: PACEY supports legal challenge against Universal Credit

Single mother Nichola cut her hours and borrowed money in order to pay for children provisions under Universal Credit (UC). The system currently requires parents to pay for childcare costs upfront if they then want to claim up to 85 per cent of them back. This involves submitting receipts and waiting up to two months before being reimbursed. 

Leigh Day solicitors, as representatives, issued a claim in the High Court against the Department for Work and Pensions stating that the current childcare provisions disproportionately affect single parents and that the current payment system underminds the UC aim of encouraging and supporting parents to move into or advance within the workplace. 

Nichola's claim is supported by evidence from PACEY as well as Save the Children, Gingerbread and the National Day Nurseries Association (NDNA).

Carolin Ott of law firm Leigh Day, said:
“Once again we see that Universal Credit seems to be working against its stated aims and is failing to ‘make work pay’. The government has refused to reconsider this policy despite clear evidence that it is a barrier to parents entering and progressing within the work place. Single parent families and therefore women are disproportionately affected and our client’s case is that the policy is both irrational and discriminatory."

Liz Bayram, the Professional Association for Childcare and Early Years (PACEY) comments:

“PACEY decided to support this important legal challenge because we know anecdotally that Universal Credit’s requirement that claimants are reimbursed for the cost of their childcare place means many vulnerable families, especially single parents, are put in an impossible position. No registered childcare providers wants to turn a family in need of childcare away but equally registered providers are struggling to cover the cost of delivering a childcare place, especially with such low levels of government funding for early education entitlements. This means the only way they can offer support to families and remain sustainable is to require a deposit for each place they provide to a family and/or a month’s advanced payment for the childcare place. This can be as much as £1000 and, when families like Nichola have to take out loans to secure a place or reduce their working hours, clearly the system isn’t working.

“Universal credit has to change to recognise the reality for parents and providers alike. We hope our evidence goes some way to support the DWP to change how it support parents like Nichola, by paying their childcare costs upfront and then facilitating manageable repayment processes that do not place vulnerable families in greater financial difficulty.”

Read the full press release.

Have you or a parent in your setting ever experienced issues like this with Universal Credit? We want to hear from you. Email policy@pacey.org.uk with your experience.