Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, for what reasons low earning families are not able to claim working tax credits or universal credit if they are using tax-free childcare.

The Government’s Childcare offer targets greater levels of support at those on lower incomes, but also offers support to parents with middle and higher incomes, who may also struggle with the cost of childcare.

Childcare costs are taken into account when Universal Credit and tax credits are calculated, and these benefits offer more generous support with childcare costs (up to 70% under tax credits or up to 85% under Universal Credit) than Tax-Free Childcare to families on lower incomes.

Parents who receive tax credits or Universal Credit can choose whether to continue receiving those benefits or to apply for Tax-Free Childcare.

More information on the help that parents can get with childcare costs can be found at https://www.gov.uk/help-with-childcare-costs.