MARTIN LEWIS has warned millions on benefits are set to miss out on childcare help announced in the Spring Budget.
Jeremy Hunt revealed huge changes to childcare for low-income, working parents in the Spring Budget.
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The Chancellor confirmed that the Universal Credit cap – the maximum amount households can get for childcare help – is to be increased.
But MoneySavingExpert founder Martin Lewis revealed around two million households, who claim child or working tax credit, will miss out on the boost.
In a video posted on Twitter, he said: “The one big miss on this is that it does not apply to those on legacy benefits.
“In other words, those who get tax credit for childcare will not see the equivalent uplift.
“Once the numbers come out, my suspicion is that many who have higher childcare costs, and are on tax credits, will be better off shifting to Universal Credit.”
The maximum amount of cash parents can claim will go up from £646 to £951 for one child, and from £1,108 to £1,630 for two – an increase of just under 50%.
The changes will come in from the summer this year.
The Chancellor also announced that childcare costs will be paid upfront for those on Universal Credit.
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Currently, parents on Universal Credit can claim back 85% of their childcare costs – but they have to pay upfront first.
It means mums and dads have had to find more than £1,000 for a month’s nursery care in advance before getting any support.
Struggling parents will be better off in a year under the plans, making it easier for them to go back to work.
It comes as a major win for The Sun’s Make Universal Credit Work campaign, which has been calling for childcare support to be paid upfront and remove the barrier stopping parents from getting back to work since December 2018.
The Chancellor also revealed several other changes to childcare.
The number of children per staff member in nurseries will rise from four to five, but the changes will be optional.
Nurseries will receive more funding and people who take a childminder job will receive £600 – while agency workers who take a childminder job will receive £1,200.
More funding was announced for schools to provide wraparound childcare.
And, 30 hours free childcare was extended to parents with children aged between nine months and two years old.
Would I be better off on Universal Credit?
Households on old-style benefits are set to be transferred on to Universal Credit by the end of 2024.
The process is called managed migration and means six benefits will be axed by the Department for Work and Pensions.
This includes benefits like Working Tax Credit and Child Tax Credit.
It’s worth checking whether you will be better off after making the switch, as you can’t move back after.
There are a number of online benefits calculators that can help you work this out.
You can find them from charities such as Turn2Us, EntitledTo and Martin Lewis’ MoneySavingExpert.
Once you have applied for Universal Credit you have to wait five weeks for your first payment.
You can get an interest-free advance, but the money you are given will be deducted from future payments.
This means your monthly payments will be reduced until you pay the advance off.
What childcare help am I eligible for?
Free childcare was first introduced in 2010 and has since been extended.
You can currently get help paying for childcare for three and four-year-olds through the scheme.
The scheme will be extended again to parents of children aged nine months to two-years-old.
You can get 30 hours of free childcare per week for 38 weeks of the year (during school term time).
But you have to be getting childcare from an approved provider and the help stops when your child starts in reception at school.
Some parents can get up to 30 hours free childcare, depending on circumstances.
You can get it as the same time as claiming Universal Credit, tax credits, childcare vouchers or Tax-Free Childcare.
Some parents can also get free childcare hours for two-year-olds.
You can find out more about the 30 hours free childcare scheme here.
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