Working mum on Universal Credit says “nonsense” childcare rules have left her thousands of pounds in debt

WORKING mum Gemma Widdowfield says “nonsense” Universal Credit rules have wiped out her £1,000 savings and left her thousands of pounds in debt. 

Gemma, 35, who works in customer service says it’s a “constant struggle” to stay on top of her finances due to the way the benefit system works.

Working parents on Universal Credit get up to 85% of their childcare costs back – but the money is paid in arrears. 

The Sun has been calling on the government to change the rules and pay the cash upfront as part of our Make Universal Credit Work campaign. 

Last month, Sun columnist Nichola Salvato won a case at the high court paving the way for an overhaul of the rules. 

The working mum, 49, who got into £2,000 debt trying to pay for childcare while on Universal Credit, won a landmark victory to get her childcare costs paid upfront. 

The Department of Work and Pensions has now appealed the decision leaving thousands of parents still struggling. 

Gemma, who works four days a week while her daughter Poppy, three, goes to a childminder, is one of those parents – and now she’s in £13,500 of debt.

She told The Sun: “The UC rules left me with no wiggle room so I wiped out my savings paying for childcare upfront.

“When I first went back to work, Poppy wasn’t eligible for any free childcare hours – so it cost between £700 and £900 per month to put her in childcare.

“At around the same time my car broke, which I need to get to work, and as I had no savings to fall back on I was forced to take out a £7,500 loan on top of a loan I already had and borrow from friends and family – sending me into a spiral of debt.”

Gemma went back to work in January 2019, paying just over £700 for Poppy’s childcare for the month.

At the beginning of February, Gemma received £573.75 back from Universal Credit – but owed the childminder another £760 for the month ahead.

This means Gemma has never been able to recoup the initial upfront cost as she is always using the money she is paid in arrears to cover the month ahead.

The Sun wants to Make Universal Credit Work

UNIVERSAL Credit replaces six benefits with a single monthly payment.

But there are big problems – it takes five weeks to get the first payment and this leaves some families worse off by thousands of pounds a year.

And while working Brits can claim back up to 85% of their childcare costs, they must find the money to pay for childcare upfront.We’ve heard of families waiting up to six months for the money.

Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.

The harsh taper rate also makes it hard for Brits to get back to work.

It’s time to Make Universal Credit work. Since December 2018, we've been calling for the government to:

  1. Get paid faster: The government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop millions from being pushed into debt.
  2. Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4million families.
  3. Don’t get punished for having a family: Parents should get the 85% of the money they can claim for childcare upfront instead of being paid in arrears.

Together, these changes will help Make Universal Credit Work.

Join our Universal Credit Facebook group or email [email protected] to share your story.

Gemma pays £47.50 a day to her childminder, meaning her costs vary month to month.

She has to pay the fees upfront at the beginning of the month and her Universal Credit payment can also vary, this makes it difficult to work out how much she will get back. 

This month she had to find an extra £211, which is impossible on a tight budget. 

“It makes it hard to keep on top of exactly what you’re going to owe when,” Gemma says. “It would just be so much simpler if they paid it upfront so you’re never left scrambling to find an extra couple of hundred pounds when you receive less than you were expecting at the end of the month.

“March is a longer month, so my childcare bill is going to be £712.50 and it’s all well and good saying ‘you’ll get that extra money back’, but I need to find it in the first place so you’re always running in arrears.”

Gemma, who worked as a police officer for 11 years before having Poppy, has struggled to get herself fully back on top of her finances since putting her daughter into nursery when she went back to work. 

The mum had put away just under £1,000 in savings shortly before Poppy was born but was forced to spend almost all of it on the first month’s childcare – wiping out the safety net she had in place for her family.

She added: “I used all my savings, which luckily I had put away, but that wiped out all the money I had – and as you’re paid in arrears, you never really recoup that money back.

“If I hadn’t had to use those savings to pay for the childcare help I am entitled to – and Universal Credit just paid the nursery directly – I’d never have got into this situation.”

In the end it forced Gemma to cut back her hours at work to make childcare more affordable, bringing the cost down to between £570 and £757.50 a month.

She added: “Sometimes I do think I’d be better off working less because then I know I’d get Universal Credit, I’d be in the same situation but working fewer hours and would be able to look after my daughter myself. 

“It shouldn’t be like that though, I like working and I want to have a career so I shouldn’t have to stop. 

“We’re not asking for more money or a big change, we’re just asking for an admin change – that’s all.”

The campaign to get childcare costs upfront has been backed by a number of charities, including Save The Children, Gingerbread and the NDNA.

“For years we have been hearing from parents that the system is unfair is forcing them to run up debts, face financial hardship, or even drop out of work altogether because they can't afford to pay childcare or nursery fees in advance,” Becca Lyon, head of child poverty campaigns at Save the Children, said. 

If the rules are changed then it could help half a million parents stay in work and out of poverty.

A spokesperson from the Department of Work and Pensions said:

A DWP spokesperson said: “As legal proceedings are ongoing, the existing rules and legislation regarding childcare costs and Universal Credit remain in place.

“With Universal Credit, eligible claimants can receive up to 85% of their registered childcare costs each month compared to 70% in legacy benefits."

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