Poor parents will be hit hard by April’s cost-of-living crisis as Tory ministers refuse to raise a crucial childcare allowance - despite soaring inflation.
Three working mums today blasted the system for paying childcare up-front under Universal Credit at a hearing in Parliament.
Parents can claim 85% of childcare costs, but only up to a £646.35-a-month cap - which has not changed since 2016 and is not rising in April.
That is despite 5.5% inflation, a £693-a-year energy bills hike, a National Insurance rise, and “stealth tax” threshold freezes on income tax and student loans.
Parents also need to pay three- or four-figure sums up front and can only claim them back later under the Department for Work and Pensions (DWP) rules.
Campaigner and working mum to a four-year-old and Gemma Widdowfield, 36, told the Commons Work and Pensions Committee: “The cap is £646.35 and that’s across the country - and childcare costs do fluctuate.
“We speak to people who’ve paid childcare costs in London which are sometimes double what we’ve paid, but the cap is still the same.
“The cap hasn’t moved up for several years either.”
The former police officer added: “We’re all in the midst of a cost-of-living crisis. We’re all feeling the pinch.
“My childcare’s going up slightly but the Universal Credit cap isn’t going up at all… that’s going to be passed on to us.”
Fellow campaigner Vikki Waterman, 37, from North West Durham, told the Mirror: “It’s going to affect parents, particularly those on low incomes and single parents and those with younger children.
“It should definitely have been raised in line with inflation because it hasn’t been increased for years.”
Recalling her own past struggles with the system, she said: “You have a bowl of cereal for your tea and you have a bowl of cereal the next morning and then you go to work all day, and come back and do the same again. Because there’s nothing left - there’s no money left for anything else."
Save the Children warned the number of parents claiming childcare costs under Universal Credit has risen 48% since February 2020.
In powerful evidence, mums told the committee how they had to they had to cut their hours, borrow from family or choose between childcare and petrol to get to work.
Gemma, a senior council investigations officer, told MPs she was sent an invoice for £777.50 one month only to later receive £91 towards childcaree costs.
In another month she had to find £256 - just under a quarter of her earnings - as her costs were higher than the cap, she told MPs.
“For a low income family or a single parent, it’s still not enough really to help them work. It’s a constant struggle”, she said.
Campaigner and mum to a 13-year-old daughter Nichola Salvato, 50, said: “Even though you’re paying for that full month, anything that doesn’t fit between the Universal Credit dates doesn’t get included in this assessment period, they’re pushed on to the next period.
“So you’re potentially waiting three months - you might have paid £1,000 which you could ill afford, and it’s three months before you get the final piece of that back.
“You’re in a position where you’re getting something like £90 when you’ve paid £600.”
All three mums have previously given evidence in a previous inquiry by the same committee, but the government did not accept most of its recommendations.
Nichola won a victory over the “pay up-front” rules at the High Court but this was overturned at the Court of Appeal. She will now take it to the Supreme Court.
She told MPs: “Eventually I was in a position where childcare costs or petrol to get to work, or put the electricity on, and it was just really difficult so I dropped my hours.”
She went on: “You’re always on a back foot, and before there’s even half a chance of catching up in any way, you’re then hit with a half term or a summer holiday or something like that.”
Vikki added: "We know this pushes parents into poverty - we’ve been there ourselves.
“This is the third time I’ve been here to discuss this same thing. This is the third time I’ve taken time off work and time away from my children. It’s about time we sorted this out.
"It breaks my heart that they [other parents] are still in the position we were four years ago.”
A DWP spokesperson said: “The Universal Credit system reimburses claimants for up to 85% of childcare costs, which is significantly more generous than the previous benefits system, with upfront costs able to be covered by the Flexible Support Fund for those starting work.
“This is part of our wider £110bn welfare safety net, including our £500m Household Support Fund to help families who need further support to pay for the essentials this winter."
