New childcare support introduced to boost uptake of Universal Credit

Parents on low incomes will be eligible for support with childcare for any job, however short the hours, from 2013. The timing matches the introduction of Universal Credit, and is a positive step towards making work pay for those in part-time work and paying childcare costs. It is set to benefit 80,000 families and the majority of these are likely to be lone parents.

At present Families can get credits to cover up to 70% of their weekly childcare costs, but only if they work more than 16 hours a week. The exact amount given depends on income level, but couples with an income up to £41,000 can qualify.

Work and Pensions Secretary Iain Duncan Smith said: “We are determined to help more parents take their first steps into work, but under the current minimum hours rule parents are trapped in state dependency without the childcare support they badly need – providing yet another barrier to work.

The down side is that this is not new money and so spending here means cuts elsewhere The Financial Times reports Ian Mulheirn of the Social Market Foundation saying “Supporting childcare is necessary and makes good politics, but rather than robbing Peter to pay Paul, DWP is essentially robbing Paul to pay Paul.”

And with support at 70% of costs, it still leaves parents to find 30% of costs.

In another move, the Daily Mail is reporting that the Chancellor George Osborne is considering making Childcare tax deducible. This would be a popular move among those who pay tax, but with many low earners being removed from tax altogether, it would not offer help to those on the lowest incomes, i.e. in part-time low paid jobs.

Following up from the last blog – this is seen in political circles as a move to boost support among Women.

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