Families on benefits can claim hundreds of pounds more in childcare benefits from June

Limit parents in receipt of benefits can claim back will rise 47 per cent from 28 June

Parents on Universal Credit will soon be able to claim back hundreds of pounds more in childcare from June, as plans announced by Chancellor Jeremy Hunt aimed at boosting the economy come into effect.

Currently, those in receipt of benefits can claim a maximum of £646 per month for one child or £1,108 for two children, from the Department for Work and Pensions.

But this will rise to £951 and £1,630 respectively from 28 June, as plans set out in the chancellor’s spring Budget – aimed at removing barriers to work – come into effect, the government has announced.

The rise, a 47 per cent rise on the previous limits, is part of a multibillion-pound phased plan to majorly expand state-funded childcare, to be fully introduced by September 2025, which ministers claim will be worth up to £6,500 a year for working families.

The government will also support eligible parents with their first month of childcare costs when they either enter work or increase their hours, by providing childcare funding upfront.

Those parents will receive up to 85 per cent of their childcare costs back before their next month’s bills are due.

In the phased plan, households in England with children as young as nine months will eventually receive up to 30 hours a week of free healthcare, instead of just those with three and four-year-olds under the current policy.

Work and pensions secretary Mel Stride said: “These changes will help thousands of parents progress their career without compromising the quality of the care that their children receive.

Childcare ‘shouldn’t be a barrier to work’, says minister Claire Coutinho (PA)

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

The Department for Education will launch a consultation on Wednesday aimed at increasing the early years’ workforce in England.

A recruitment campaign to attract and retain talent is also planned for early next year, which will consider how to introduce new accelerated apprenticeship and degree apprenticeship routes.

Minister for children and families, Claire Coutinho, said while childcare shouldn’t be a “barrier to work”, the expense “has previously meant parents have had to choose between working or looking after their child”.

“We are supporting families with the largest-ever expansion of free childcare, making sure that places will be available for parents who need them. This will save a working parent using 30 hours a week an average of £6,500,” Ms Coutinho said.

“We have already announced plans to boost the amount government pays childcare providers, and now we’re knocking down barriers to recruiting and retaining the talented staff that provide such wonderful care for our children.”

It comes as households across the country grapple with decades-high inflation, with a Financial Conduct Authority study finding that more than 10 million people in the UK are now struggling to pay their bills, with some eating less and cancelling insurance policies in order to get by.

While the government wound down its Energy Bill Support Scheme in April, millions of households on low incomes are to receive further cost-of-living support from the government worth up to £1,350 in total this year. You can read about the help available in June here.

Additional reporting by PA