MARTIN LEWIS has warned that millions of benefits will miss out on childcare aid announced in the spring budget.
Jeremy Hunt unveiled massive childcare changes for low-income working parents in the Spring budget.
The chancellor confirmed that the Universal credit cap – the maximum amount that households can receive for childcare allowance – will be increased.
But Savings expert founder Martin Lewis revealed that about two million households claiming child or work credits will miss out on the boost.
In a video posted on Twitterhe said: “The only major flaw is that it doesn’t apply to people on old benefits.
In other words, those who get childcare tax credits won’t see the same increase.
“Once the numbers are out, I suspect many who have higher childcare costs and tax credits will be better off with Universal Credit.”
The maximum amount parents can claim will increase 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 take effect from the summer of this year.
The chancellor has also announced this childcare costs are paid in advance for those with Universal Credit.
Currently, with Universal Credit, parents can Reclaim 85% of childcare costs – but they have to pay in advance first.
It means mums and dads have had to find more than £1,000 in advance for a month of childcare before getting any support.
Parents who are struggling are expected to be better off in a year’s time, making it easier for them to return to work.
It comes as a big win for The Sun’s Create Universal Credit Work campaignwhich since December 2018 has been calling for childcare allowance to be paid in advance and to remove the barrier that prevents parents from going back to work.
The Chancellor also announced several other childcare changes.
The number of children per staff member in day care centers will go from four to five, but the changes are optional.
Day care centers get more money and people who take on childminder jobs get £600, while temporary workers who take on childminder jobs get £1,200.
More funding has been announced for schools to provide wraparound childcare.
And 30 hours of free childcare was provided to parents with children between nine months and two years old.
Would I be better off with Universal Credit?
At the end of 2024, households on old-style benefits will transfer to Universal Credit.
The process is called managed migration and means six advantages will be abolished by the Ministry of Work and Pensions.
This includes benefits such as work tax credit and child tax credit.
It’s worth checking if you’re better off after making the switch, as there’s no going back after that.
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’ MoneySavings expert.
After applying for Universal Credit, you must wait five weeks for your first payment.
You can get an interest-free advance, but the money you get will be deducted from future payments.
This means that your monthly payments will be reduced until you have paid off the advance.
Which childcare allowance am I eligible for?
Free childcare was first introduced in 2010 and has since expanded.
At the moment, you can get help with paying for childcare for three and four-year-olds through the scheme.
The arrangement will be extended again to parents of children from nine months to two years old.
You can receive 30 hours of free childcare per week for 38 weeks per year (during school period).
But you must receive childcare from a recognized provider and the help stops when your child comes to school in childcare.
Some parents can receive up to 30 hours of free childcare depending on the circumstances.
You can get it at the same time as claiming it Universal credit, tax credits, childcare vouchers or tax-free childcare.
Some parents can also get free childcare hours for two-year-olds.
You can learn more about the 30 hours free childcare scheme here.
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