Universal credit: qualifying childcare costs

Relevant childcare charges

Relevant childcare charges mean charges for childcare that is registered or approved by the appropriate authorities, such as Ofsted.

Your childcare provider should be able to provide you with their registration number. It is important that you check with the relevant authority to make sure your childcare provider’s status is current and also make sure that they renew their registered or approved status each year.

The exact rules about regulation of childcare vary depending on where you live in the UK and more information can be found in the DWP guidance starting at F7031.

Examples of relevant childcare

Some types of childcare that provide face to face tuition or supervised activity may be regarded as relevant childcare charges. Activity clubs such as ballet lessons and football clubs or tuition classes may be registered with OFSTED or the equivalent and DWP have said they will need to decide case by case whether these are reasonable and relevant childcare for universal credit. Childcare that is not registered or approved  will not qualify for help with childcare costs through universal credit. If a childcare provider was registered and then that registration lapses, you must inform DWP immediately.

The childcare claimed for must be used to enable you to start, or stay in, paid work. The costs also need to be attributable to that assessment period.

Examples that are not relevant childcare

Care provided by a foster parent of the child is excluded childcare for universal credit and so any charges paid do not count as relevant childcare charges.

Any charges paid for your child’s compulsory education do not count as a relevant childcare charge.

The amount of childcare charges paid by you can be reduced if the DWP consider them to be excessive when considering the amount of paid work you are doing relative to your childcare costs. For example, working 16 hours a week but claiming childcare for 40 hours, DWP may consider whether this is excessive.

Childcare charges are also reduced by any amount that is met by an employer (such as through childcare vouchers) or some other person or out of funds provided by the Government in connection with participation in work related activity or training.

Your childcare provider might ask for a sum of money to keep a place for your child – this is sometimes known as a retainer. DWP say this is not eligible for reimbursement as relevant childcare costs for universal credit unless it is actually an advance payment for childcare costs.

Relatives providing childcare

There are special rules if your child is looked after by a relative. Childcare by a close relative in the child’s own home is excluded.

Close relative for universal credit is defined in relation to the child. So a grandparent is not classed as a close relative of a child. Care provided by a close relative away from the child’s home is acceptable.

More information about excluded childcare can be found in the DWP guidance in Chapter F7 – starting at F7066.