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Universal Credit, which is replacing six existing benefits and merging them into one, will be used to determine which disadvantaged two-year-olds are eligible for ‘free’ childcare.
The controversial welfare reform has been criticised for long delays in payments, during the switchover, which is pushing people into debt. Under The new eligibility criteria will be used once Universal Credit is fully rolled out.
The Government wants to expand its current ‘free’ childcare offer of 15 hours for disadvantaged two-year-olds in England to a further 8,000 children
Minister for Children and Families Robert Goodwill said: “This is an important issue and it is important that we get this right. We want to hear from families, early years professionals and other experts throughout this consultation so we can identify those children who need our support most.
“The introduction of Universal Credit lies at the heart of the Government’s commitment to help people improve their lives and raise their incomes. This consultation will make sure the two-year-old entitlement continues to be targeted where it is needed most.”
Around 160,000 disadvantaged two-year-olds already receive 15 hours of ‘free’ childcare a week.
Under the new proposals, ‘free’ childcare will only be available to parents with a net earnings income threshold of £15,400 per year for those in receipt of Universal Credit. A household’s net earnings do not include their additional income through benefits. So a typical family earning around £15,400 per annum would, depending on their exact circumstances, have a total household income of between £24,000 and £32,000 once benefits are taken into account.
Offering more two-year-olds 'free' childcare' is the right thing to do
Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA) commented on the consultation, saying : “Expanding the two-year-old offer to give more children the best start in life is the right thing to do.
“Teachers are already seeing that children who have benefitted from the two-year-old 15 hours of funded childcare are starting school ready to learn. A play-based approach to high quality early education is the best way to reduce the widening inequality gap.”
However she added: “Although we welcome this additional investment in childcare, the Government must not forget that the 30 hours scheme for three and four-year-olds is struggling on inadequate funding. As business costs rise and hourly rates stagnant or reduce, nurseries are having to question whether they can continue to offer funded hours at all.”
Children already receiving 'free' childcare will not lose their hours
The Government has said that no child will lose their childcare hours if they are already in receipt of the offer, regardless of the new earnings threshold.
Some children are eligible for the free childcare for non-economic reasons and these will still apply.
This is if the child is looked after by the local authority or if the child has left care through special guardianship or an adoption or child arrangements order.
Also if the child has a current statement of SEN (special educational needs) or an education, health and care plan (EHC); or if the child is entitled to Disability Living Allowance.
Universal Credit replaces six means-tested benefits and tax credits: the income-based Jobseeker’s Allowance, Housing Benefit, Working Tax Credit, Child Tax Credit, income-based Employment and Support Allowance and Income Support.
You can have your say on the consultation here