Universal Credit Childcare — How to Claim Up to 85% of Costs

What is the Universal Credit childcare element?

If you are working and claiming Universal Credit, you could get up to 85% of your childcare costs paid back to you. This is known as the childcare element of Universal Credit, and it is one of the most generous forms of help with childcare costs for working parents in the UK.

Unlike Tax-Free Childcare, which gives you a 20% top-up, Universal Credit covers a much higher share of what you actually spend. For many families on lower incomes, this can make the difference between affording nursery fees and having to turn down work.

The childcare element is paid as part of your monthly Universal Credit payment. It is not a separate benefit — it is an extra amount added on top of your standard allowance and any other elements you receive.

Use our childcare cost calculator to work out how much you could save.

How does Universal Credit help with childcare costs?

Universal Credit pays back up to 85% of your registered childcare costs each month, up to a maximum cap. Here is how it works in practice:

1. You pay your childcare provider directly, as you normally would.
2. You report the costs through your Universal Credit online journal.
3. UC pays you back up to 85% of those costs in your next monthly payment.

The key thing to understand is that you need to pay for childcare first and then claim the money back. This upfront payment requirement can be a hurdle, but there is help available if you are starting a new job (more on that below).

Maximum amounts you can claim back

The most you can receive each month depends on how many children you have:

Children	Monthly maximum (2025/26)	Monthly maximum (from April 2026)
1 child	£1,031.88	£1,071.09
2 or more children	£1,768.94	£1,836.16

Note: the 2+ children rate is a flat cap — it applies whether you have 2, 3, or 4 children. Check the latest rates at gov.uk as they are uprated each April.

What does 85% actually mean in pounds?

To put this into context, if your nursery costs are £1,200 per month for one child, 85% of that is £1,020. That falls within the monthly cap, so you would get the full £1,020 back through Universal Credit. You would effectively pay just £180 per month for childcare.

Monthly childcare cost	85% of cost	UC pays you back	You pay
£600	£510	£510	£90
£900	£765	£765	£135
£1,200	£1,020	£1,020	£180
£1,400	£1,190	£1,031.88 (capped)	£368.12

Remember, UC also interacts with your earnings. If you earn more during an assessment period, your total Universal Credit payment may go down. The childcare element is added to your overall UC payment, which is then tapered based on your income.

Who is eligible for UC childcare support?

To claim the childcare element, you must meet all of the following criteria:

Work requirements

• You must be in paid work. There is no minimum number of hours — even a few hours per week counts.
• If you live with a partner, both of you must be in paid work.
• Starting a job counts. If you are due to start work within the next month, you can begin claiming.

You are not eligible if you are only doing voluntary work and receiving expenses.

Exceptions for partners

You can still claim even if your partner does not work, provided they:

• Have a health condition or disability giving them limited capability for work (LCW or LCWRA)
• Care for a severely disabled person and are eligible for Carer’s Allowance
• Are temporarily away, for example in hospital

Parental leave

You may also be eligible if you are on maternity, paternity, adoption, or neonatal care leave and receiving statutory pay (such as Statutory Maternity Pay or Maternity Allowance).

Child requirements

• Your child must be under 16 (up to 31 August after their 16th birthday).
• The childcare must be with a registered provider — Ofsted-registered in England, Care Inspectorate-registered in Scotland, or Care Inspectorate Wales-registered in Wales.
• Qualifying providers include nurseries, preschools, childminders, nannies, after-school clubs, breakfast clubs, and holiday clubs.

How to claim UC childcare costs

You’ll need to stay on top of your paperwork — here’s the step-by-step process:

Step 1: Pay for your childcare

You need to pay your childcare provider first. Keep all invoices, receipts, or bank statements as proof of payment.

Step 2: Gather your evidence

You will need two types of proof:

Provider details (one-off):

• Provider name, address, and phone number
• Registration number (Ofsted, Care Inspectorate, etc.)
• Names of the children they look after
• Type of childcare (nursery, after-school club, etc.)

Payment proof (each time you claim):

• Dates of childcare you paid for
• Amount paid
• Date of payment
• A paid invoice, or a combination of receipts and bank statements

Step 3: Report costs on your UC journal

Log into your Universal Credit online account and report the childcare costs through your journal. Do this as soon as you pay — you must report costs within the assessment period you paid them, or the assessment period after. If you report late, you may not get the money back.

Step 4: Receive payment

Your childcare costs reimbursement is included in your next monthly Universal Credit payment. Try to arrange monthly payments with your childcare provider so the timing lines up with your UC assessment periods.

Getting help with upfront costs

If you are starting a new job or increasing your hours and cannot afford to pay childcare upfront, you may be able to get help:

• Starting a new job: You may get all your childcare costs paid for the first month.
• Increasing hours: You may get your additional childcare costs covered for one month.
• Deposits and retainers: You may also get help if your provider requires a deposit.

To apply, update your journal in your Universal Credit account or speak to your work coach at your local Jobcentre. You will not need to pay this money back.

Universal Credit childcare vs Tax-Free Childcare

This is one of the most important decisions you will make about childcare funding. You cannot claim both Universal Credit and Tax-Free Childcare at the same time. If you open a Tax-Free Childcare account, your entire Universal Credit claim stops — not just the childcare element.

Here is how they compare:

Feature	Universal Credit childcare	Tax-Free Childcare
How much is covered	Up to 85% of costs	20% top-up (£2 for every £8 you pay)
Maximum per year (1 child)	Up to £12,382/year	£2,000/year
Maximum per year (2 children)	Up to £21,227/year	£4,000/year
Payment method	Paid back monthly via UC	Paid into government childcare account
Income limit	No upper earnings limit (but UC tapers with income)	Neither parent can earn over £100,000
Minimum hours	No minimum	Must earn equivalent of 16 hours at National Minimum Wage
Child age limit	Under 16	Under 12 (under 17 if disabled)
Can use with free hours?	Yes	Yes

Which is better for you?

For most families eligible for Universal Credit, the childcare element is significantly more generous. You get 85p back for every £1 of childcare, compared to 20p with Tax-Free Childcare.

However, there are situations where Tax-Free Childcare might be better:

• If your income is high enough that your UC would be fully tapered away
• If you have older children (Tax-Free Childcare covers up to age 11, though UC covers up to 16)
• If you prefer paying into an account rather than claiming money back

Use the government’s childcare calculator to compare which scheme saves you more based on your specific circumstances. You can also use our childcare cost calculator to estimate your total childcare spend.

Tips for managing UC childcare payments

The upfront payment requirement and monthly assessment cycle can make budgeting tricky. Here are some practical ways to stay on top of it:

Align payments with your assessment period

Ask your childcare provider if you can pay monthly, timed to fall within your UC assessment period. This makes it easier to report costs promptly and receive reimbursement in the same cycle.

Report costs immediately

Do not wait until the end of your assessment period. Report childcare costs to your journal as soon as you pay them. Late reporting can mean lost money.

Keep a simple record

Create a folder (physical or digital) for each month containing your provider invoices and payment receipts. This saves time if UC asks for evidence and helps you stay on top of what you have claimed.

Combine with free childcare hours

You can use the childcare element of Universal Credit alongside your free childcare hours entitlement. Use your free hours first, then claim UC childcare for any additional paid hours. This can dramatically reduce your out-of-pocket costs.

Budget for the gap

Because you pay first and claim back later, there will always be a gap between spending the money and receiving it back. If possible, try to build up a small buffer during your first few months to smooth out the cash flow.

Ask about the Flexible Support Fund

If you are genuinely struggling with upfront childcare costs at any point — not just when starting a new job — speak to your work coach. They may be able to offer discretionary support through their local budget.

Finding nurseries that accept UC childcare

Any Ofsted-registered nursery, childminder, or childcare provider is eligible for Universal Credit childcare support. You do not need to find a special “approved” provider — if they are registered, your costs qualify.

You can find nurseries near you on Good Nurseries and check their Ofsted registration status, fees, and the funding options they accept. When you contact a nursery, ask about:

• Their fee structure and whether they offer monthly payment plans
• Whether they accept free childcare hours alongside paid sessions
• What documentation they can provide for your UC childcare claim (invoices, receipts)

Once you’ve got the claims process running smoothly, getting back 85% of your childcare costs makes a real difference to whether working pays off financially.