The DWP’s latest Universal Credit change is yet more nonsense, and will still leave people worse off

A jobcentre queue the Universal Credit and DWP logos - representing benefits claimants childcare


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The Department for Work and Pensions (DWP) is changing how much money it pays to some parents and guardians of children under Universal Credit. It’s increasing one of the allowances within the controversial benefit. However, even with the rise the DWP is still leaving those who are reliant on childcare hundreds of pounds a month short.

Universal Credit: another increase in payments

BBC News reported that the DWP will be rolling out a change to the amount it pays in childcare costs to parents/guardians. Chancellor Jeremy Hunt announced it in his Spring Budget. Until now, the department has paid £646 a month, per kid, towards childcare costs under Universal Credit. Now, as BBC News wrote:

The government will allow parents on the benefit to claim back £951 for childcare costs for one and £1,630 for two or more children – a 47% increase.

DWP secretary of state Mel Stride has trumpeted about the news – feeding into his department’s false narrative about how too many people are economically inactive. This means people who don’t work, and aren’t looking for work. Stride said:

These changes will help thousands of parents progress their career without compromising the quality of the care that their children receive.

By helping more parents to re-enter and progress in work, we will be able to cut inactivity and help grow the economy.

Of course, as the Canary previously reported, the DWP’s push to get economically inactive people into work is nonsense – not least because there aren’t enough jobs in the first place. However, even if you ignore this, Universal Credit’s increase in childcare costs payments is still nonsense.

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DWP: mo money, mo nonsense

The cost of childcare is huge:

  • For full-time childcare, the average cost is £285 a week.
  • For part-time, it’s £148 a week.

The DWP’s £951 maximum for one child is per Universal Credit assessment period. That’s usually a calendar month – running from the same date one month to the next. So, on that basis the department would pay, at the most, £219 a week.

This is £66, or 23%, short of the average costs. Meanwhile, in 2022 parents were already paying out up to two-thirds of their wages on childcare.

So, Stride’s claim of the DWP ‘helping parents re-enter’ work is based on parents effectively being worse off in work. Plus, as Green Party work and welfare spokesperson professor Catherine Rowett pointed out:

Much like the benefit increases in April, the DWP’s Universal Credit childcare costs rise don’t actually reflect the reality of real life. It can claim it’s a rise all it wants – but the department is still leaving people who are reliant on the benefit in dire straits.

Featured image via the Guardian – YouTube, Paisley Scotland – Flickr, resized under licence CC BY 2.0, and Wikimedia 

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