LOW-INCOME working parents could save hundreds of pounds a year thanks to two huge changes to Universal Credit.
Chancellor Jeremy Hunt has revealed the changes for families on the benefit as part of his Spring Budget.
Speaking in the House of Commons, Mr Hunt has confirmed that childcare costs will be paid upfront for those on Universal Credit.
The maximum amount of cash parents can claim will also go up from £646 to £951, and from £1,108 to £1,630 for two – an increase of just under 50%.
Currently, parents on Universal Credit can claim back 85% of their childcare costs – but they have to pay upfront first.
While the amount of cash parents could claim has been frozen at the same amount since 2005.
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It means mums and dads have had to find more than £1,000 for a month’s nursery care in advance before getting any support.
Struggling parents will be better off in a year under the plans, making it easier for them to go back to work.
It comes as Mr Hunt also announced the following in today's Budget:
- Millions of households will save £160 after the Energy Price guarantee was extended
- Cigarette prices will rise after the government hiked tobacco tax
- Drivers won’t pay more for fuel as duty was frozen and a 5p cut will continue in a huge win for The Sun’s campaign to keep it low
- The lifetime allowance on pensions will be axed and the annual allowance will increase
- The government will give councils £500m to fix potholes
- Millions of energy customers on prepayment meters will no longer pay more
- Jeremy Hunt unveiled 12 low-tax investment zones across the country
- Alcohol duty on beer in pubs will be cut, saving 11p per pint – but tax on wine and spirits will increase
- The Chancellor confirmed that benefits will rise next month
- Corporation tax will rise to 25% next month
- The government will extend free childcare to 30 hours for one and two-year-olds
- Working parents on Universal Credit will get more for childcare and costs covered straight away
Speaking in the Commons Mr Hunt said: "I want to help the 700,000 parents on universal credit who, until the reforms I announced today had limited requirements to look for work.
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"Many remain out of work because they cannot afford the upfront payment necessary to access subsidised childcare."
It comes as a major win for The Sun’s Make Universal Credit Work campaign, which has been calling for childcare support to be paid upfront and remove the barrier stopping parents from getting back to work since December 2018.
Unfair and expensive childcare costs mean 75% of mums say it doesn't makes financial sense to work, new research has found.
The Sun previously spoke to a mum-of-two who was desperate to work, but couldn't because taking a job would mean she had to foot an £800 childcare bill upfront.
While, a working mum called the rules “nonsense” after they wiped out her £1,000 savings and left her thousands of pounds in debt.
She told The Sun: “The Universal Credit rules left me with no wiggle room so I wiped out my savings paying for childcare upfront."
The Chancellor's plans have been welcomed by charities who had warned of parents falling into debt due to the childcare system.
Dan Paskins from Save the Children said: "The UK Government has made the right decision in deciding to pay childcare fees for those on Universal Credit upfront rather than in arrears.
"This is good for families, good for our economy and most of all, good news for children."
Under the plans announced today, benefit claimants will be asked to attend more work coach meetings and attend skills boot camps to help them get back to work.
The Chancellor's "back to work" plan will also aim to get more over-50s in employment, as well as people with disabilities and long-term illnesses.
Speaking ahead of the Budget, Mr Hunt previously said: "For many people, there are barriers preventing them from moving into work – lack of skills, a disability or health condition, or having been out of the jobs market for an extended period of time.
"I want this back-to-work Budget to break down these barriers and help people find jobs that are right for them."
The Chancellor also revealed several other changes to childcare.
The number of children per staff member in nurseries will rise from four to five, but the changes will be optional.
Nurseries will receive more funding and people who take a childminder job will receive £600 – while agency workers who take a childminder job will receive £1,200.
More funding was announced for schools to provide wraparound childcare.
And, 30 hours free childcare was extended to parents with children aged between nine months and two years old.
For more information on the changes introduced please our roundup.
What else has been announced?
Meanwhile, households will be pleased to know that the Energy Price Guarantee is not increasing but is staying frozen at £2,500 for the average household until July.
Plus, drinkers face huge tax hikes after the Chancellor confirmed that the price of wine and spirits will rise from August.
Mr Hunt also confirmed that energy firms will be barred from charging four million families who use prepayment meters more for their energy.
Motorists have also been given a boost in today's Spring Budget as local councils are set to receive £200million to fix potholes.
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