New row over Credit system

CHILDCARE payments under Universal Credit “directly conflict” with the Government’s key aim of getting more people into work, according to a powerful Commons committee.

A report by the Work and Pensions Committee said making parents pay for childcare costs upfront and then claim reimbursement from the Government can leave households waiting weeks or even months to be paid back.

Its chairman, veteran backbencher Frank Field, said: “If the Government had set out to design a system to make it harder for parents to get into work, it could hardly have done better than this one.

“It’s not just driving parents into despair and debt and creating problems for childcare providers - it’s also actively working to prevent the Government achieving its own aim of getting more people into work.”

He and a cross-party group of MPS put together the research, saying that as things stand under Universal Credit “some 100,000 households including the poorest - will receive less for their childcare costs than under the legacy system”.

The report states: “Too many will face a stark choice: turn down a job offer, or get themselves into debt - to the Department for Work and Pensions (DWP), or to friends, family or other loan providers - in order to pay for childcare.”

The DWP says this system will help to reduce fraud, and prevent people making false claims for childcare.

But the committee concluded: “Prioritising this objective has created a barrier to employment that will be insurmountable for some households.”

And that approach “is in direct conflict with Universal Credit’s wider objectives”.

The report says Universal Credit should be updated so that it starts making direct payments for childcare support.

In response a DWP spokeswoman said: “This report doesn’t acknowledge that with Universal Credit childcare is more generous.

“Working parents can claim back up to 85% of eligible costs, compared to 70% on the old system.”