SINGLE mums on Universal Credit are being pushed into debt and forced into using high-interest loans and credit cards as they struggle to pay for childcare costs.
They’re also cutting back on food and other essentials, turning to food banks, as well as turning down better jobs because they can’t afford upfront nursery bills, according to Save the Children.
Under the controversial benefits system, working parents can claim up to 85 per cent of their childcare costs – worth up to a maximum of £646 a month for one child or up to £1,108 a month for two or more children.
But they have to pay these bills in advance before waiting up to a month to be reimbursed. And bills often end up being much higher than what the government pays out.
The Sun is calling for these costs to be paid upfront by the Department for Work and Pensions (DWP) as part of our Make Universal Credit Work campaign.
It comes as single mum Nichola Salvato, is taking the DWP to court after she was pushed into taking out payday loans to fund childcare.
Single mum forced to use payday loans to fund childcare
NICHOLA Salvato, 38, is demanding the government step up to make childcare work under Universal Credit, after she went more than £1,000 into debt trying to take on a new job.
The single mum, who lives in Brighton with her ten-year-old daughter, Sofia (both pictured), says the system discriminates against women – and it goes against the principle of trying to help people back into work.
She adds that Universal Credit unfairly penalises lower earners, when other childcare systems don’t require Brits to fork up upfront.
She told The Sun Online: “It was incredibly stressful – I was forced to borrow from my family, reduce my hours and take out several loans over a period of months.”
The High Court has confirmed that Nichola’s case is arguable, so she’s now been granted a so-called judicial review of the Universal Credit childcare system.
A judicial review is the process in which judges review the decisions of public bodies, such as the Department for Work and Pensions, and consider whether the law has been correctly followed.
A date for the hearing has yet to be announced.
Just last week, the High Court ruled that Nichola’s case is arguable, so she’s now been granted a so-called judicial review of the Universal Credit childcare systems (see the box above for more information).
Another single mum, Lauren Anderson, told The Sun she was forced to quit her job as she didn’t earn enough to pay for childcare upfront.
While Save the Children spoke to another single mum who told the charity she’d had to resort to food banks to feed her two-year-old daughter after borrowing £1,590 to pay for childcare, plus a nursery deposit of £200.
The mum added that she’d also had to borrow on credit card, gone into rent arrears, and had to cut down to just one meal at day for herself to ensure her daughter could eat.
Save the Children says 81 per cent of parents receiving childcare support through Universal Credit are single mums, with 35,000 currently receiving help compared to 1,000 dads.
But the charity adds that they’re struggling to fork out for childcare costs, with the average monthly fee for a one-year-old in England standing at £1,084.
The Sun wants to Make Universal Credit Work
UNIVERSAL Credit replaces six benefits with a single monthly payment.
One million people are already receiving it and by the time the system is fully rolled out in 2023, nearly 7 million will be on it.
But there are big problems with the flagship new system – it takes 5 weeks to get the first payment and it could leave some families worse off by thousands of pounds a year.
And while working families can claim back up to 85 per cent of their childcare costs, they must find the money to pay for childcare upfront – we’ve heard of families waiting up to 6 months for the money.
Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.
It’s time to Make Universal Credit work. We want the government to:
- Get paid faster: The Government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop 7 million from being pushed into debt.
- Keep more of what you earn:The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4 million families.
- Don’t get punished for having a family: Parents should get the 85 per cent of the money they can claim for childcare upfront instead of being paid in arrears.
Together, these changes will help Make Universal Credit Work.
Join our or email [email protected] to share your story.
Becca Lyon, head of UK child poverty at Save the Children said: “Not only are women already shouldering most of the burden of childcare, they’re now being unfairly penalised by a system which makes it even more difficult for them to go back work.
“Not only does this new system unfairly disadvantage women, it could also undermine the whole point of Universal Credit – to help more parents into work and boost their pay.”
The charity is now calling on the government to take action in tomorrow’s Budget.
DWP says Universal Credit claimants can claim for childcare costs for the month before they start work if they have accepted a job offer, as well as for at least a month after employment ends if they move jobs.
More on Universal Credit
It adds that those struggling to afford the upfront costs may be eligible for help through the flexible support fund – your work coach can explain how to apply.
A DWP spokesperson said: “Working parents can get more than £1,100 a month for childcare through Universal Credit, and help is available with any up-front costs.
“Those who want to know if they are eligible for help with childcare should visit .”