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Parents’ experiences of claiming the childcare element of Universal Credit

Family lounge scene
Published: July 2019

Save the Children UK commissioned NatCen to conduct a qualitative research study to explore parents’ experiences of claiming the childcare element of UC in England.

Universal Credit (UC) is now replacing Working Tax Credits (WTC) and Child Tax Credits (CTC) for those on low incomes. As part of UC there is also a childcare subsidy, like that provided under WTC, which offers working parents financial support to meet their childcare costs.

The childcare element of UC allows eligible parents to claim back up to 85 percent of their childcare costs.

Little is known about families’ experiences of claiming the childcare element of UC, as parents currently using WTC to claim childcare are gradually transitioning from one system to the other. There are also relatively few new UC claims where the childcare element has been claimed. Within this context, Save the Children UK commissioned NatCen to conduct a qualitative research study to explore parents’ experiences of claiming the childcare element of UC in England.

Aim

The overall objective of the research is to understand parents’ experiences of claiming the childcare element of UC. The specific aims of the research cover four core themes:

• Exploring parents’ journey through claiming the UC childcare element

• Exploring the facilitators and barriers to claiming the UC childcare element

• Gathering suggestions on improving the experience of claiming the UC childcare element

• Recording experiences of claiming UC generally

Key findings

Six key topics emerged from interviews with parents.

1. A combination of different factors influenced take up of the UC childcare element
Parents’ decision to take up the UC childcare element were influenced by their previous experience of claiming childcare costs via Tax Credits; attitudes to work; attitudes to formal childcare and; expectations about the childcare element. These four factors combined in different ways to encourage or detract parents from claiming the childcare element.

2. Parents struggled paying the initial upfront childcare payment
To pay the initial upfront childcare payment and wait between three to nine weeks to be reimbursed 85 per cent of their childcare costs was a struggle for parents. In some cases, parents were unable to pay bills and other household expenses. Parents coped by: relying on other funding sources (such as taking out loans); negotiating with their childcare provider to pay their fees once they had been reimbursed via their UC claim; or using less childcare while they waited to be reimbursed.

3. Parents used a range of ways to manage the monthly upfront payments to their childcare providers
Parents built trust and negotiated payment dates with their childcare provider, budgeted carefully, and/or or relied on financial support from family and friends.

4. Parents reported a range of challenges that affected their ability to pay their childcare provider upfront
Parents regularly experienced issues which affected their childcare element and, consequently their ability to pay the childcare provider. For example, fluctuating UC payment amount, missing payment cut-off dates, and administration errors.

5. Parents presented some suggestions to improve the UC childcare element
• Better communication and information, clear and responsive communication, and dedicated teams who specialised in the UC childcare element.
• Further support for parents, including: access to face-to-face and financial support.
• Design changes to the UC element, including: reduced waiting period; direct payments to childcare provider and regular payment dates.

6. Key issues with parents' overall UC claim
Parents experienced three main issues with their UC claim:
• Difficulty coping with an overall reduction to their household income;
• Difficulty managing monthly payments and;
• Finding it challenging to prioritise paying rent directly to their landlord.

Methods

A total of 16 face-to-face interviews were conducted in January and February 2019 with parents who had experience of claiming the UC childcare element for a child aged five or under. Interviews were conducted in Oldham and London, where the highest number of UC childcare element applications have been made. The Interviews were transcribed and analysed using Framework analysis. 

Download the report