Mother wins f ight to have childcare credits paid in advance
A SINGLE mother yesterday won a landmark High Court case over a policy which forces parents to pay upfront for childcare costs.
Nichola Salvato – who fell into debt trying to pay the fees after she returned to work – brought a legal challenge against the ‘proof of payment’ policy of only reimbursing money once it has been spent.
Currently the Department for Work and Pensions will only refund 85 per cent of childcare costs through Universal Credit payments once it has proof they have been paid.
Miss Salvato, 49, from Brighton, tried to return to work full-time in her role as a housing association adviser once her daughter turned ten, but found herself relying on payday lenders to pay for care.
She suffered anxiety as she struggled to make childcare payments and eventually had to reduce her working hours.
She brought a judicial review against the policy, arguing that the money should be paid to parents in advance as long as they have proof that they are liable for the payments.
Ruling in her favour, Mr Justice Chamberlain concluded the policy has ‘disproportionately prejudicial’ effects on women and is ‘irrational’. The ruling has significant ramifications for around half a million parents, experts said.
The judge said the policy was ‘bound to have a greater adverse effect on women than on men’ because women earn ‘substantially less’ than men as a group.
He added: ‘The proof of payment rule contributed to making the claimant materially worse off – financially, psychologically and ultimately in terms of her ability to realise her ambition to work fulltime – than she would have been if the (childcare costs element) had been payable on proof of liability to pay childcare charges.’
In a statement after the ruling, Miss Salvato said: ‘I’m over the moon…I always felt that the rule was unfair and discriminatory.
‘It seemed ridiculous that the most hard-up families getting help for childcare costs through Universal Credit had to find the money for childcare costs upfront, sometimes thousands of pounds per month, while better off families earning up to £200,000 per year got help for their childcare costs in advance through the tax free system.’
In a statement, Save the Children said the ruling will help ‘half a million parents’ to stay ‘in work and out of poverty’.