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<p /> <p>Universal credit prepares claimants for the world of work in which around
75% of employees are paid monthly and in arrears. Monthly payment of benefit, which
includes support for childcare costs that have been paid out, makes for more straightforward
reporting and helps households to budget on a monthly income, which eases the transition
into paid work.</p><p> </p><p>Moving to a system of ‘childcare accounts’ which ring-fences
childcare costs would complicate the system for these claimants. It would add complexity
to the Universal Credit system, which is being rolled out in a safe and controlled
manner and could potentially increase the administration costs of running two systems
in parallel.</p><p> </p><p>We have worked with Her Majesty’s Revenue and Customs (HMRC)
to support claimants that may wish to switch between Universal Credit and Tax Free
Childcare. It will be easy for parents to register and open a childcare account online
for Tax Free Childcare, and those who wish to move back to Universal Credit may do
so without having to report the change to HMRC. Both systems are designed to be simple,
responsive and flexible.</p><p> </p><p>We recognise the importance of providing information
and support to help parents make an informed choice about which scheme to access.
Alongside wider guidance and information, we will provide support and online tools
for parents choosing between Universal Credit and Tax-Free Childcare.</p>
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