Single mum who got £2,000 into debt wins landmark Universal Credit court case to get childcare paid upfront
A SINGLE mum on Universal Credit has won a landmark court case to get childcare costs paid for upfront.
Sun columnist Nichola Salvato, 49, took the government to court after getting into £2,000 worth of debt trying to pay for childcare.
It's a huge win for The Sun's Make Universal Credit Work campaign, which played a big part in supporting the court case's defence.
It could set a precedent for half a million other working parents on benefits who can't afford to stump up the cash to pay for nursery or childminder fees.
The decision will help stop mums and dads being pushed further into debt when trying to find a job or go to work.
Nicola said: "It’s an absolute win for The Sun’s campaign. Its support helped us secure today’s ruling and we couldn’t have done it without them.
The Sun wants to Make Universal Credit Work
UNIVERSAL Credit replaces six benefits with a single monthly payment.
By the time the system is fully rolled out in 2023, nearly 7million will be on it.
But there are big problems with the flagship system - it takes five 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% of their childcare costs, they must find the money to pay for childcare upfront - we’ve heard of families waiting up to six 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. Since December 2018, we've been calling for 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 millions 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 4million families.
- Don’t get punished for having a family: Parents should get the 85% 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 UniversalCredit@the-sun.co.uk to share your story.
“I’m overwhelmed. It’s fantastic. It is ridiculous that the most hard-up families have to pay childcare upfront, costing sometimes thousands of pounds a month.
"Even on a full-time salary it’s very hard to find the spare cash to pay for childcare upfront.
"The government now needs to take action on this and makes it easier to support working parents with families."
"Stuck in a cycle of debt"
Working parents on Universal Credit can claim up to 85% of childcare costs.
You get £648 for one child and up to a maximum of £1,108 for two children.
But parents can't claim the money without proof of payment. The cash is also paid in arrears, putting even more pressure on hard-up households.
Nicola, who lives in Brighton, regularly writes a column for us answering readers' questions on Universal Credit.
In 2018, she ended up getting into thousands of pounds worth of debt trying to cover the cost of childcare over the summer holidays.
She incurred late fees on household bills and took unpaid leave from work as a full-time welfare rights adviser for a housing association to look after her daughter.
The single-mum was forced into a "cycle of debt", owing £2,000 to family and doorstep lenders.
She felt she was left with no other choice but to reduce her hours from 32 hours a week to 24.5 hours in order to cut down her childcare costs.
"Discriminates against women"
Today's ruling branded the "proof of payment" rule as unlawful and that it discriminates against working mums.
The judgement concluded the rule "ultimately makes them more dependent on benefits" if parents feel they need to cut back on working hours in order to afford childcare.
The DWP argued removing the need to prove childcare fees would open the system up to fraud.
But Mr Justice Chamberlain said submitting an invoice for upcoming fees would not result in any more "error or fraud" than a receipt.
The ruling also suggested the support be issued through a voucher or discount system, rather than a Universal Credit element.
What to do if you have problems claiming Universal Credit
IF you're experiencing trouble applying for your Universal Credit, or the payments just don't cover costs, here are your options:
- Apply for an advance - Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it's a loan which means the repayments will be automatically deducted from your future Universal Credit payout.
- Alternative Payment Arrangements - If you're falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you're part of a couple.
- Budgeting Advance - You may be able to get help from the Government for emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You'll have to repay the advance through your regular Universal Credit payments. You'll still have to repay the loan, even if you stop claiming for Universal Credit.
- Cut your Council Tax - You might be able to get a discount on your Council Tax by applying for a Council Tax Reduction. Alternatively, you might be entitled to Discretionary Housing Payments to help cover your rent.
- Foodbanks - If you're really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the
He added that the system discriminated against women in particular ";because women as a group earn substantially less than men as a group."
Mr Justice Chamberlain said: "It follows that women are substantially more likely than men to be denied access to the [childcare costs element] because they do not have enough money to pay childcare charges out of their own funds before being reimbursed."
Nichola's legal challenge was supported by Save the Children, Gingerbread, the Professional Association for Childcare and Early Years (PACEY) and the National Day Nurseries Association (NDNA).
Nichola's solicitor, Carolin Ott from Leigh Day, said: "The Secretary of State committed to a ‘test and learn’ approach in rolling out Universal Credit yet refused to listen to the many campaigning organisations and individuals who have raised this issue for a number of years.
"Our client hopes that the Secretary of State will accept the ruling and take urgent steps to fix this perverse situation which, as noted by the Court, is a barrier to work and has disproportionately prejudicial effects on women."
A DWP spokesperson said: “This is currently a matter for the Court and the Secretary of State is appealing this decision”.
Since starting legal proceedings against the DWP, Nichola has set up a new community interest company called Parent Poverty to help with benefit, housing and domestic abuse advice. The group is raising cash for the project through .
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It's the second legal blow suffered by the DWP over Universal Credit this year.
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In June, three judges ruled the Universal Credit assessment dates as "irrational and unfair"after four mums took the government to court.
The ruling could potentially help around 85,000 claimants who are left skint and out of pocket because sometimes two paydays falls into the same assessment period.