Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, whether she has made an assessment of the potential merits of changing the universal credit childcare payments system to make it similar to Tax Free Childcare in allowing the top-up to be provided through a government account.

Universal Credit (UC) childcare costs is already a generous offer that pays up to 85% of registered childcare costs each month, up to £646.35 for one child aged up to 16, and £1,108.04 for two or more children aged up to 16. This could be worth up to £13,000.

For every £8 families pay in to their online Tax-Free Childcare (TFC) account, the Government will make a top-up payment of £2 up to a maximum of £2,000 per child per year (or £4,000 a year for disabled children) aged up to 11.

By being different the two benefits provide a wider offer to parents and eligible claimants can choose which option suits their circumstances. In addition to accessing free childcare, parents can choose to move between TFC and UC, with good reason to do so, if their circumstances change.

Both UC and TFC childcare offers align with the free childcare offer that provides 15 hours a week of free childcare in England for all 3 and 4 year olds and disadvantaged 2 year olds, doubling for working parents of 3 and 4 year olds to 30 hours a week. The UC childcare costs element can be used to top up a claimant’s eligible free childcare hours if more hours are worked and childcare required. However, you cannot claim Tax-Free Childcare at the same time as claiming Universal Credit.