Universal Credit: childcare Contents

4Complexity and awareness of support

48.There are multiple ways that parents and carers can claim help with childcare costs depending on their income, working status, and the age of their child.107 Save the Children described this as a “complex patchwork” of policies. This complexity can make it very difficult for some parents to understand what they are entitled to claim, and which scheme would be best for them financially.108 Survey research by the Social Mobility and Child Poverty Commission found that just under half of parents (47%) were either entirely unaware of the support they could access, or were confused about what they could claim. This lack of knowledge was more pronounced amongst low income families. 54% said they did not know or were confused about childcare options, compared to 36% of high income families.109 The Department’s research on UC specifically found that awareness of the UC childcare offer amongst claimants was inconsistent. More than four in ten claimants who had children (43%) reported being unaware of the UC childcare offer.110

Advice and information

49.The Low Incomes Tax Reform Group (LITRG), a charity, told us that confusion and complexity about childcare support results from three main factors. These are:111

i)The different qualifying conditions for each scheme. LITRG supplied an illustrative list of the “subtle but important” differences between qualifying conditions, demonstrating the complexity these create for people trying to navigate the system.

ii)The extent to which claimants would be better off under each system. We heard that this cannot be based on a one-off “snapshot” decision since “very few people have static lives”. Changes of working hours, income and childcare costs can “all affect which scheme is financially the most beneficial”. This means households need to be able to easily review whether the option they have chosen remains appropriate when their circumstances change.112

iii)The interaction between the different schemes. While some types of support can be claimed concurrently (such as TFC and 30 hours free childcare), others cannot. LITRG and the Child Poverty Action Group drew our attention to the fact that UC claimants who start a claim for TFC, for example, will see their entire UC terminated.113

50.Jobcentre Plus Work Coaches—frontline support staff—could play a role in helping claimants understand the childcare options available to them.114 The Department told us that Work Coaches are “fully trained and provided with detailed guidance about the help available for claimants to pay for childcare in Universal Credit”.115 Witnesses reported, however, that Work Coach awareness of childcare support within and outside UC is often poor. Save the Children commented that Work Coaches are “critical to the success of UC” and must be able to be relied on as a “trustworthy source of information by low-income families”. They described it as “unacceptable that so many families are not aware of the childcare entitlements offers under UC”, and of wider support across DWP, the Department for Education, and HMRC.116 We, the NAO and PCS Union, which represents JCP staff, have previously noted the substantial pressures that Work Coaches are already working under.117 During our inquiry on Universal Credit and support for disabled people we heard that Work Coaches are struggling with learning to work with UC itself, and with having to support increasingly complex and large caseloads of claimants.118

51.LITRG explained that parents’ and carers’ difficulty in understanding and choosing their childcare support is compounded by there being “no single source of advice or guidance that covers all of the schemes” available. In part, this is a result of the schemes being spread across different Departments. UC staff cannot answer questions relating to Tax Free Childcare, for example, while the helpline for TFC claimants cannot answer questions relating to UC or tax credits.119 We heard that this fragmentation leads to “low levels of knowledge [amongst UC staff] about how the [childcare] system operates as a whole”: they are missing vital contextual information about the relative benefits and downsides of other schemes.120 LITRG noted that there is a childcare calculator available on Gov.uk, accessed via the Childcare Choices website. It allows parents and carers to calculate how much support they can receive with childcare and which schemes they are eligible for.121 Although Universal Credit is listed as a source of support on Childcare Choices, however, the Calculator does not currently include Universal Credit. Responding to the Treasury Committee’s inquiry on childcare, HMRC said that it “plans to enable users to input their UC entitlement into the calculator so they can make a direct comparison with other forms of childcare support”.122 LITRG noted that:

While this is better than not covering UC at all, it is not a suitable replacement for a fully functioning calculator that calculates UC entitlement as it does tax credits.123

LITRG further recommended that in addition to a central online hub and calculator, the Government should provide a central point of telephone support on childcare support schemes.124 Currently the Department directs claimants towards third-party benefit calculators and support services if they need personalised help and information on choosing a childcare scheme.125

52.Pare nts and carers who want to claim support with childcare face a series of confusing decisions. They have to choose from up to seven different schemes, each with different qualifying conditions and interactions. Personalised, good quality advice on their options is vital: not just at the start of a claim, but throughout as their circumstances change. Yet schemes are split across Departments. Finding someone who can give authoritative and comprehensive guidance can be very difficult. This difficulty is compounded by the fact that the Government’s main tool for helping claimants assess their options—the Childcare Calculator—does not include Universal Credit. We recommend that Government updates the Gov.uk Childcare Calculator to calculate fully Universal Credit entitlement as it currently does for tax credits. This should be operational before the Department starts moving large numbers of claimants to Universal Credit in mid-2020.

53.An online Childcare Calculator will work well for some Universal Credit claimants. But others will struggle to use the Calculator, and even those who manage may have questions or concerns that can only be answered in person. Work Coaches have a role to play in signposting claimants to advice, and the Department must ensure they are given enough time to learn about the new systems they are working with. Given other pressures on them, however, the Department should be aware of their limitations in providing the detailed, comprehensive support on a range of schemes—most of them not run by DWP—that some claimants will need. We r ecommend that alongside developing the Childcare Calculator, the Department engages with Citizens Advice (its delivery partner for the Universal Support service) about how in-person, expert advice and support on childcare schemes can be included in and funded via Universal Support.