Universal Credit claimants will be able to claim more money back from the Government to cover childcare costs from June 28.
The amount parents can claim back from the Department for Work and Pensions (DWP) each month will rise to £951 for one child and £1,630 for two or more children.
This represents a rise of 47% from the previous limits of £646 for one child or £1,108 for two or more children.
The move will give those eligible up to an extra £522 a month.
Some of those eligible will also be able to get one month's childcare paid upfront, instead of having to pay the full cost and getting it reimbursed later.
The Government says it will provide this when parents enter the work force or significantly increase their hours.
Those parents will also continue to receive up to 85% of their childcare costs back - which the Government says will be back with them before next month’s bills are due.
The DWP says this should allow parents to pay childcare costs one month in advance going forward.
The plans were originally announced in the Government's Spring Budget this year.
The Spring Budget was coined the "Back to Work Budget" by Chancellor Jeremy Hunt as his plan mainly focused on getting Brits back into work.
The Government says the extra childcare support for low-income households is worth a total of £900million.
Claire Coutinho, minister for children, families and wellbeing said: “Childcare shouldn’t be a barrier to work, but the expense has previously meant parents have had to choose between working or looking after their child.
“We are supporting families with the largest ever expansion of free childcare, making sure that places will be available for parents who need them. This will save a working parent using 30 hours a week an average of £6,500.
“We have already announced plans to boost the amount Government pays childcare providers, and now we’re knocking down barriers to recruiting and retaining the talented staff that provide such wonderful care for our children.”
This was not the only childcare change seen in the Spring Budget.
The Government also announced that it was going extend free childcare to cover all children of eligible working under the age of five years.
However, this plan is being implemented slowly with the first stage set to come in in two years time.
From April 2024, 15 hours of free childcare per week will be made available for eligible working parents of two-year-olds
From September 2024, 15 hours of free childcare per week for eligible working parents of nine month to two year olds
And from September 2025, 30 hours of free childcare per week for eligible working parents of all under-fives.
To support the childcare sector and deliver the Budget promise, from September the hourly rates paid to providers to deliver free childcare for two-year-olds will increase by 30% from an average rate of £6 to £8.
The Government will also be launching a new recruitment campaign early next year to attract more workers into the sector going forward.
You can look at all the childcare promises made in the recent Spring Budget here.
