Universal Credit vs Childtax credit (childcare)

hulahoop09

Hiya

Okay so atm we dont claim anything apart from child benefit. me and my husband work full time. We are pregnant with number 2 due end of the year. I will take 9 months SMP and will then return back to work next summer. When number 2 arrives we will get approx £40pm child tax credit. Atm grandparents have my little one while we work but when I return to work next year they will have to go into childcare for the 3 days a week which will cost us approx £1040pm. As it stands atm with 2 children in childcare we would get approx £450pm in child care costs and approx £300pm child tax credits. Obviously all of this would go to the childcare provider and we would top up out of our wages.

I had heard how the government were trying to help working parents with childcare costs etc which of course they would be helping us a lot with the above childcare costs that we could claim as if they didnt we would be stuffed either way. Lol.

But now I have been hearing about Universal Credit and how it will be replacing certain benefits one being child tax credit/childcare costs. I am now worried on how this will affect us come next year and for the few years our toddlers are in childcare while we work. Are they likely to cut what we are able to claim (hate using the word entitled lol). Are they going to be pushing working parents into hardship with childcare costs?

Thanks in advance. :beer:

sammyjammy

There will be transitional protection for anyone already claiming before Tax credits starts rolling out (currently set to be April 2014 but I wouldn't bank on it!).

If you have savings over £6k then once the transitional protection runs out or if you make a claim after UC for tax credits starts then the amount you would be entitled to would be reduced, anything over £16k you would not be entitled.

ETA I am not 100% sure if transitional protection applies to the capital element, I am sure someone else will confirm or deny.

hulahoop09

Thanks, not sure I know what transitional protection means. We will have an active claim from november this year where we will be getting approx £40pm for the 2 children but the childcare element wont be claimed until around june/july 2014 so wondering if we are gonna miss the changeover and lose a lot of childcare help?

I wish we had savings, would be a wonderful thing. Lol.

sammyjammy

Transitional protection just means that if you were getting say £200 under TC and then UC came along and calculated under that benefit you were only due £150 you would still get the £200 for an agreed period of time (unless you declared a change in which case the protection would stop)

In your case if you were moved over to UC before July 2014 you wouldn't get the protection after you made that change, the likelihood of you claiming UC before July 2014 is very slim, they will do new claims before they start moving existing claimants over.

Don't assume you will lose out under UC, you may actually gain.

There is some useful info here - bit of a big read though!

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/192654/universal-credit-toolkit-quick-guide-your-family.pdf

sammyjammy

This one explains transitional protection

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181344/ucpbn-transitional-protection.pdf

And there is a whole series about individual bits of UC here

https://www.gov.uk/government/publications?keywords=universal+credit&publication_filter_option=all&topics[]=all&departments[]=department-for-work-pensions&world_locations[]=all&direction=before&date=2013-05-01

hulahoop09

Thanks for the link, page 2 was straight off a big help lol. It seems the maximum amounts of childcare allowed are not much different to what they currently are so hopefully it wont affect us too much. Hopefully they wont reduce childcare costs too much. I heard regarding the other help towards childcare costs a couple of monhts ago which will take place from 2015 onwards but its all so confusing! Lol.

benefitbaby

Hi,
For UC the rates are... 70% of childcare costs paid of up to £760 per month for the first child, or 70% of up to £1,300 for two or more children per month.

sammyjammy

benefitbaby wrote: »

Hi,
For UC the rates are... 70% of childcare costs paid of up to £760 per month for the first child, or 70% of up to £1,300 for two or more children per month.

That's not what the document in my first link says

"The childcare cost element helps you to pay for registered childcare while you are working.
You will be able to claim back 70% of your actual paid out childcare costs. In any month this
payment is capped so you could receive a maximum childcare payment of £532.29 for one
child or £912.50 for two or more children."

benefitbaby

I had my UC training today so I would have hoped it would be accurate... however I have just looked up the UC regulations and I happily stand corrected.

hulahoop09

Seems we would get under 50% in childcare cost help and the rest of CTC which we would need to use towards childcare also.

I have found a UC calculator which not sure how accurate it is or can be but seems we will get approx £150+ less than what we would currently. Only £40 of this is actual childcare costs reduction seems the rest is what will get taken from us in what we would atm get in ctc which gives us a total loss of approx £150 per month which we were going to use towards childcare. lord knows what we will do as £150 is a chunk and between now and next june/july childcare costs will likely increase. Looks like I am gonna be stressing for the next year