Anyone stop claiming the funded hours after the changes because of UC?

[GinnyBee]

I find ourselves in the bizarre situation that now that my son went from 15 to 30 hours of funding in September, we are actually £150 worse off per month because of the new rules of how they have to invoice us. So the nursery is getting less money but we are paying more for the same hours because UC doesn't cover the full invoice anymore. So it strikes me that we would actually be financially better off to stop claiming the funding and just pay private fees so UC would accept the full invoice again 🤔Has anyone done this?

@GinnyBee Not sure I understand UC have never covered the full invoice they pay up to 85% up maximum amount for 1 child or more. Uc won’t cover food or consumables if invoiced separately.

Yeah I know this, what I meant is that they’re not considering the full invoice for the claim anymore. Our invoice is actually £250 less per month since September, but we’re getting less UC and ending up paying £150 more per month which is crazy!

Sorry that still doesn’t make any sense. UC will pay up to 85% for childcare used over the funded hours. How much UC reimburses you does depend on childcare used and paid for in your assessment period. Unless your invoice is the same date as your assessment period you’ll always have childcare reimbursed over more than 1 ap. the childcare element is also not protected from deductions. So if your wage deductions are too high you may want to consider tax free childcare

If you’re entitled and choosing not to claim funded hours, they won’t cover them. They have some leeway to allow for grace periods and funding application dates but when your claim is reviewed, you’d have a massive overpayment.

How high is the consumables charge is you'd be better off without funded hours?

UC won’t pay meals and consumables or anything extra. We used to include these in our price before we had to separate them on the invoice - for the parents we were told - but UC now won’t pay our parents their full invoice (the 85%). They only pay 85% of what might be over funded hours.

However, families that don’t need UC can claim on tax free childcare and get the full invoice paid includin meals and consumables - I think they also pay around 85% of the invoice.

Basically poorer families are being penalised for being on a lower wage and needing UC!

Yes, this is exactly what I mean! The changes to how providers are required to invoice now means that children on UC are missing out. It was supposed to save families money but it’s actually the opposite.

Tax free childcare is only 20% though, not 85%.

Tax free childcare only tops up the 20% tax paid, so for every £80 put in by the parents, they get £20 added to their account as refunded tax, which pays £100 of their fees

Editted to correct typo(and should have been as)

For private sessions it’s just invoiced in one fee that covers everything so UC would consider the whole whack in their calculations, but with funded hours they’re asking us to deduct the extras from the reported costs, so it works out as more expensive for us. Getting back 85% of the full amount of a much bigger invoice is better than getting back 85% of only 65% of the smaller invoice.

If you’re relying on UC to pay childcare then many nurseries won’t let you switch to an entirely private billing system. So you will probably need to shop around.

They'll have to change that, I believe, the new Government legislation doesn't allow for "one fee invoicing" at all.

But that's the answer. The Government have mandated the change, because we can't afford the funded hours, and this cheapens how much UC have to contribute towards childcare.

Regardless, sadly, if you don't claim the funded hours, they'll adapt your invoice as if you had.

Thank you, this is what I wanted to know.

For private hours it is just one fee that includes all aspects of care including food, consumables and activities and UC will pay on the whole bill.

For funded hours it needs to be all separated out and UC won't pay the separate consumables bill.

I am having the same issue with Universal Credit regarding childcare costs, specifically around meals and consumables on our nursery invoice.

UC have always covered these costs since my son first started nursery, but because the nursery recently updated the way their bills are itemised, UC are now refusing to pay the same charges they have previously accepted without question.

They are saying these costs are “voluntary”, and therefore not eligible. However, the only guidance they keep referring me to is this link:

https://www.gov.uk/government/publications/early-years-funding-2025-to-2026/easy-explainer-early-years-funding-rates

This guidance is only about the free childcare entitlement (15/30 hours) and what nurseries can or cannot charge for during funded hours. It does not relate to Universal Credit childcare support at all, and it does not say anywhere that UC cannot reimburse meals, consumables, or similar charges.

The UC guidance itself says that parents can claim up to 85% of their childcare costs, and it only excludes charges that are genuinely voluntary or optional. It does not list meals or consumables as ineligible.

The nursery have explained to me that the charge is technically “voluntary” because they must use that wording for the funded hours, but in reality my son cannot attend his sessions without paying it. There is no practical opt‑out, and we completely understand why — we love the nursery, they have been fantastic, and we would never want to cause them any issues. We would honestly rather take the financial hit ourselves than put them in a difficult position.

My son has been there since he was one year old and starts school in just over seven months. Moving him now would be disruptive and not in his best interests.

I’ve challenged UC several times and asked them to provide the actual DWP legislation that says these costs cannot be covered. They haven’t provided anything relevant and keep pointing me back to the early years funding link above, which has nothing to do with UC rules.

I have already written to my local MP because this seems to be a wider issue affecting other parents too, and UC appear to be applying the wrong legislation.

If anyone else has dealt with this or has any advice, I’d really appreciate hearing your experience.

I think we ended up writing a letter for our parents explaining that meal times are part of our education ie hot lunches we teach healthy eating, how to use knife and fork etc and that none of the other children have packed lunch and we prefer them not to even though we have to allow the opt out option.

I believe the parents did then get this paid, so it might be worth approaching your nursery to ask.

Can you explain this to me with a simple example in numbers? I sit on a DWP partner group that feeds these things back. I can share this with them.

Lets say a child attends nursery for 30 hours a week and it costs £300.
Universal credit pays the parent back 85% of the bill so the parent is paying £45 a week.

Now the child is eligible for 30 hours free childcare. The funding is less than the nursery's normal fee. In order to make up the difference the nursery needs to charge the parent something, however the government rules are that the nursery cannot charge a top up, but they may make 'voluntary' charges.
So the nursery charges £10 a day for food, £5 a day for 'consumables' eg nappies, wipes, tissues, suncream.
These are all itemised on the invoice as voluntary charges as per the government rules, however realistically the nursery expects they're paid.
UC won't cover it as it's 'voluntary'.
So the parent is now paying £75 a week.

@VikaOlsonthank you. I will feed that back