Nursery fees and Universal Credit - help!

[slurps]

It’s a long one!

I had a child in 2020, I was 6 months pregnant when I was made redundant due to Covid. When my maternity pay ran out we applied for Universal Credit (me and my fiancée) and I have been receiving this since. I applied for jobs in the last few months and have managed to find a good full time job close by and a place in a day nursery for my child. The child is 3 and will start school in September 2024.

My issue is the childcare costs will eat up more than half my pay - I will take home about £1600 after tax every month and nursery fees are £1277 (this is with his free 30 hours funding). Apparently I don’t qualify for tax free childcare because I am on UC; I don’t know if I will be receiving any money from UC when I start working. I can cancel my claim for UC and then claim the tax free childcare. My question is, am I better off staying on UC or cancelling my claim and getting the tax free childcare?

I’m just a bit down about it all because I was so proud of myself for getting a job after a few really tough years, and now most of my paycheck will be going towards paying for strangers to look after my child. I will actually be financially worse off when I go back to work compared to staying at home on benefits. It’s worth it in the long run though as once he starts school those fees won’t be there.

Thanks for reading this far!

Have you tried an online UC calculator?

That is a crazy amount if it is after the 30 hours have come off. Are you sure that's correct?

If you put your household income etc into entitledto.co.uk it will give you a better idea of what - if anything - you would get on UC.

Also, is your partner contributing to the childcare costs?

Choose a cheaper nursery or find a childminder.

You can claim upfront childcare costs through UC for the first month of starting work. There are forms you and the provider will need to complete and if all ok the nursery will be paid direct. This is through the Flexible Support Fund (FSF). Once you get the invoice for each payment to the nursery you claim it back again through UC every month. 85% of the costs will be included as an element of your UC award.

Whether you get any UC is dependent on the total of all the elements you are eligible for LESS deductions for your joint wages. Use a benefit calculator for this as we don't know your circumstances.

Going off to look at the calculator now.

Yes, they are the correct fees - I spoke with the nursery and they confirmed. They charge so much because you get charged their opening times 8-6 regardless of how many hours your child does. Also they provide breakfast, lunch and dinner.

I can't find a cheaper nursery or childminder. I live in a semi rural area and don't drive (have my test booked for January but not hopeful of passing). There are no other options locally that are cheaper, I have explored them all.

My partner and I pool all our money, so it makes no difference if I pay for it or he does, we end up with the same amount of money. Also he can't do drop offs/pick ups because he is self employed and works long hours to enable us to afford rent and bills.

Thanks for the suggestions.

Can you work nights to avoid childcare costs fulltime? What does your partner earn?

Threads like this me thankful I hung onto my job, had my own house and eventually told my sons father to leave!

A couple of things…

Firstly, I find it very difficult to believe that the nursery fees are that much for a F/T place minus 30 hours free/funded. If your child is there 50 hours a week, and 30 (or even 22 if they allow you to spread it out over the year) aren’t yours to pay, that would suggest that the daily rate is either £105 or £147 per day. Are you sure that’s right?? I’d ask for a breakdown. You’ve already stated you don’t live in London so I really can’t imagine they’re this high. And breakfast, lunch and dinner being included is standard. They’re not doing you any favours or anything special with that.

The other point. Run the figures through EntitledTo based on both your new income (and your partner’s) and what your fees will be (once you’ve double and triple checked these). If you’re not going to be entitled to UC at that point you’d cancel your claim and then open a tax free childcare account. But not before you claim help with the upfront childcare costs!! Put a message on your UC journal (message for your Work Coach) requesting Flexible Support Fund to help with upfront childcare costs. They’ll need you to go into the JobCentre to sign the form in person, and will most likely want to see your job offer or employment contract, but it’ll save you a lot doing this. Upfront costs are a killer.

Congratulations on finding a job! And please don’t be too disheartened. The childcare fees are the responsibility of both you and your partner, and just think of the other benefits (pension, a proper break from being mum, higher self-esteem etc) to you working.

I can well believe that the costs are as stated due to the hours and the 'extras'. Nurseries have to make a living too. Bear in mind this will only be for 8-9 months as your son will start school in September ( that might well bring it's own problems though due to any wraparound care needed). Any Ofsted registered provider can be used for wraparound childcare so when your child starts school if you need to use breakfast or after school clubs or a childminder and you're still eligible for UC you can continue to claim 85% of the costs back.

Why on earth are they charging a full day if that's not needed!!!!!! Such a joke

I only offer full days, I can't sell the remaining hours that are blocked by people using part days.