FAMILIES on Universal Credit could be plunged into an additional £800 worth of debt due to rising childcare costs during the school holidays, according to a new report.
The study by Save the Children found that struggling parents turn to working overtime, borrowing cash or relying on friends and family in order to pay the bills over the break.
3 Childcare costs rise during the school holidaysCredit: Getty – Contributor
Parents can claim up to 85 per cent of childcare costs under Universal Credit but they have to fork out for the upfront fees first, adding to financial pressures.
The Sun wants the government to pay for these costs upfront as part of our Make Universal Credit Work campaign.
As part of our campaign we’ve spoken to hundreds of struggling parents on Universal Credit, such as single mum Freya Mcfarlane who was forced to turn down paid work for the DWP because she couldn’t foot the £800 childcare bill upfront.
Another mum, Carly Smith, was forced to turn down her dream job because she couldn’t afford the upfront childcare costs either.
3 The report by Save the Children found the rise in childcare costs during the school holidays varies depending on the regionCredit: Save the Children
But with the summer holidays on the horizon, Save the Children is warning that financial woes will only worsen for the 30,000 families claiming the benefit.
On average, parents with a three-or four-year-old will see bills rise by £631 during the summer holidays, while those who are entitled to 15 free hours for their two-year-old will need to find an extra £320.
But the costs vary by region, with those in central London needing to fund an extra £830 from their own pocket, and another £749 in Greater London.
Parents in the South East will see bills rise by £654, while those in Wales will have to find another £645.
The increase in bills is all to do with the amount of free childcare families are entitled to, on top of their benefits.
3 On average, childcare fees rise by up to £631 a month per child during the holidaysCredit: Save the Children
In England, low-income families with a two-year-old are entitled to 15 hours a week free childcare.
While all families with a three-to four-year-old are also entitled to 15 hours free childcare, regardless of how much they earn.
On top of this, parents who earn between the equivalent of 16 hours a week on minimum wage and £100,00 are entitled to an extra 15 hours free, bringing their entitlement up to a total of 30 free hours a week.
But these are only available for 38 weeks of the year, forcing parents to pick up the bill during the remaining 14 weeks.
Typically, the free hours can’t be claimed during the school holidays – around 55 per cent of childcare providers don’t offer them outside of term-time – pushing up bills for working parents.
The charity is warning that it could push vulnerable families on Universal Credit even further below the poverty line as they try to meet the up font costs of the dramatic bill hike.
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But the Department for Work and Pensions (DWP) says parents can choose to split or “stretch” the hours across the entire year with some providers allowing you the equivalent of 11 hours free a week.
A spokesperson told The Sun: “Help with upfront childcare costs is already available, either through our non-repayable Flexible Support Fund or as a budgeting advance.
“We’re committed to helping parents into work and those on Universal Credit can claim up to 85 per cent of their childcare costs, worth up to £13,000 a year for families with two children.”
The Sun wants to Make Universal Credit WorkUNIVERSAL Credit replaces six benefits with a single monthly payment.One million people are already receiving it and by the time the system is fully rolled out in 2023, nearly 7 million will be on it.
But there are big problems with the flagship new system – it takes 5 weeks to get the first payment and it could leave some families worse off by thousands of pounds a year.
And while working families can claim back up to 85 per cent of their childcare costs, they must find the money to pay for childcare upfront – we’ve heard of families waiting up to 6 months for the money.
Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.
It’s time to Make Universal Credit work. We want the Government to:
Get paid faster: The Government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop 7 million from being pushed into debt.
Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from 63p to 50p, helping at least 4 million families.
Don’t get punished for having a family: Parents should get the 85 per cent of the money they can claim for childcare upfront instead of being paid in arrears.
Together, these changes will help Make Universal Credit Work.
Join our Universal Credit Facebook group or email UniversalCredit@the-sun.co.uk to share your story.
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