⚠️ We are currently updating our 2021/22 tax guidance across the website
How much can I claim?
This page explains how much childcare support can be claimed through the childcare element of universal credit and what costs can be included in each assessment period.
⚠️ Please note that due to the impacts of the coronavirus outbreak in the UK (March 2020 onwards), several alterations to the normal rules relating to the childcare element of UC are in place. Please see our coronavirus section for more information.
The amount of the childcare element in any assessment period is 85% of the charges for relevant childcare, subject to a maximum of £646.35 for one child or £1,108.04 for two or more children. (The percentage of childcare costs allowed in universal credit increased from 70% to 85% from April 2016.)
You can only claim these amounts for costs paid that are attributable to your particular assessment period (we explain below what this means).
Assessment periods and childcare costs
You can claim for charges paid in that assessment period for any relevant childcare but only if those charges are attributable to that assessment period.
To be attributable to an assessment period those costs:
- Have to be paid in that assessment period for childcare in respect of that assessment period, or
- Have to be paid in that assessment period for childcare in respect of a previous assessment period, or
- Have to have been paid in either of the previous two assessment periods for childcare in respect of that assessment period (if you are a new universal credit claimant, costs paid in the two months prior to the start of your universal credit award will be counted here – for more on this see DWP's guidance in Chapter F7 at F7056).
Angela has an assessment period that starts on the 13th of each month and ends on the 12th of the following month. She pays her childcare bill on 10th January for the costs she incurred during December. She informs DWP of these costs on 11th January.
In this case, the amount Angela pays on 11th January is attributable to her assessment period that runs from 13th December to 12th January. This is because the costs she paid that cover 1st December to 12th December, are costs that have to paid in that assessment period for childcare in respect of a previous assessment period (so fall under the second bullet point above) and the costs she has to pay to cover childcare from 13th December to 31st December are costs that have to be paid in that assessment period for childcare in respect of that assessment period (so fall under the first bullet point above).
Things become slightly more complicated where costs are paid in advance. Although you should be able to claim for amounts paid up to two months in advance, you may not be able to claim for them at the time you pay them.
Instead, DWP will work out how much of the payment was for costs in advance and you will claim that amount in the assessment period where you actually use the childcare.
Prisha has an assessment period that starts on the 13th of each month and ends on the 12th of the following month. She pays £500 childcare costs on the 10th January and reports this childcare cost to DWP on 11th January. The £500 is to cover childcare costs for January (31 days) and February (29 days) so some of the £500 is to cover costs in the current assessment period and some of the £500 is to cover costs for a future assessment period.
Prisha will have this £500 included her universal credit as follows (subject to the maximum limits set out above):
- In the assessment period of 13th December to 12th January, 12 days of childcare in that assessment period is covered by the payment made on the 11th January and so DWP will allow £100 (£500 x 12 days/60 days) to be included as childcare costs in the calculation of Prisha’s universal credit award for that assessment period.
- In the assessment period of 13th January to 12th February, 31 days of childcare in that assessment period are covered by the payment made on the 11th January and so DWP will allow £258.33 to be included as childcare costs in the calculation of Prisha’s universal credit award for the period 13th January to 12th February £500 x 31 days/60 days.
- In the assessment period of 13th February to 12th March, 17 days are childcare in that assessment period are covered by the payment made on the 11th January and so DWP will allow £141.65 to be included as childcare costs in the calculation of Prisha’s universal credit award for the period 13th February to 12th March £500 x 17 days/60 days.
This means that although Prisha incurred a cost of £500 for relevant childcare on 11th January, DWP spread the childcare costs out so she receives her universal credit childcare support across three months.
It also means that if Prisha has regular childcare costs to pay in the third month (13th February to 12th March) the £141.65 will be added to those regular costs when working out the maximum amount she can claim for that assessment period.
The amount of childcare charges you can claim can be reduced if a DWP decision maker thinks that those charges are excessive when looking at the amount of paid work that you (and your partner) do.
There are no strict rules about what makes a childcare cost excessive and so it will be up to the DWP decision maker to decide, taking account of all of the information including your working patterns and the childcare patterns.
DWP guidance states that decision makers should be aware that:
- Childcare charges can still be excessive even if they are less than the maximum limits
- The availability (or lack of availability) or suitability of childcare providers may warrant higher childcare costs
- The location of the provider in relation to the claimant’s work and the available transport options may require longer periods of childcare
- No account is taken of the level of the childcare charge per hour
- Reasonable travel time should be included to the extent to which the claimant is in paid work
- Comparisons with other registered childcarers should not be made
- School holidays, age of the child and any disability can legitimately increase the time needed for childcare
- Childcare may have to be purchased in blocks of time or sessions which can legitimately increase the childcare costs
If DWP think the costs are excessive, the amount claimed will be reduced by the amount of the excess. You will have a right of appeal against a decision to reduce childcare costs.
Your childcare provider might ask for a sum of money to keep a place for your child – this is sometimes known as a retainer. DWP say this is not eligible for reimbursement as relevant childcare costs for UC unless it is actually an advance payment for childcare costs.
Costs paid by other people
You can only claim help with childcare costs that you actually incur. The amount of childcare costs included for universal credit will be reduced by any amount that is met by an employer or some other person. This includes payments out of funds provided by the Government that are in connection with your participation in work related activity or training.
If you receive childcare vouchers from your employer, you will need to deduct them from your childcare costs for universal credit purposes. We explain more about this on our universal credit interactions page.