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Chapter F7: Childcare costs element

Contents
F7001:Introduction

Qualifying conditions
F7010:General test

The work condition
F7011:Single claimant in paid work
F7012:Couples in paid work
F7014:What is paid work
F7015:Treated as in paid work
The childcare costs condition
F7020:General test
F7021:Relevant childcare
F7031:Time limits to notify childcare costs
F7034:Excluded childcare
Amounts
F7040:Childcare charge limit
F7041:Excessive charges and reductions
Childcare costs element extension period
F7050:Run on after death
Definitions
F7065:Meaning of proprietor
F7066:Meaning of school premises
F7081:Close relative
F7082:Qualifying young person
F7084:School

Chapter F7: Childcare costs element

F7001 Introduction

Support for the costs of childcare within UC will be available to lone parents and to
couples, where all members are either in work or are treated as in work, regardless
of the number of hours they work.

F7002

A claimant's maximum amount will include a specific additional element where the
claimant incurs a cost for at least one dependent child that requires registered
childcare.

[F7003-F7009]

Qualifying conditions

F7010 General test F7013 F7031

An amount in respect of childcare costs is to be included in an award of UC where
the claimant satisfies in respect of an assessment period
1. the work condition (see F7011 to F7015) and
2.
the childcare costs condition (1) (see F7020 to F7030).
UC Regs, reg 31
The work condition

F7011 Single claimant in paid work F7010 F7015

The first condition of the childcare element requires that the claimant is in paid work.
This condition is met, in respect of an assessment period, if the claimant
1.
is in paid work or
2.
has an offer of paid work where he is due to start that work before the end of
the next assessment period (1).
UC Regs, reg 32(1)(a)

Example

Colin is in receipt of UC with an assessment period that runs from the 8th of each
month. On 12.3.14. Colin secures a new job which he is to start on 6.5.14. For the
purpose of the first condition of the childcare costs test Colin is in paid work for the
assessment periods that run from 8.3.14.

F7012 Couples in paid work

Unless F7013 applies, where the claimant is a member of a couple (1) (including a
person who is a member of a couple but who is paid as a single person (2)) both
members of that couple have to be in paid work.

1 WR Act 12, s39; 2 UC Regs, reg 3(3);

F7013 F7012

Where only one of the couple is in paid work, the work condition described at
F7010.1 is still met if the partner who is not working is unable to provide childcare
themselves because they
1. have LCW (See ADM Ch F5) or
2. have regular and substantial caring responsibilities for a severely disabled
person (See ADM Chapter F6) or
3. are temporarily absent from the claimant's household (1) (See ADM Ch E2).
1 UC Regs, reg 32(1)(b)

Example

The UC benefit unit comprises of Ben, Sara and their daughter Pauline. Ben works
as a cleaner for 2 days each week, Sara does not work but is unable to look after
Pauline whilst Ben is at work because she is providing full time care for her disabled
mother who also lives with them. For the purpose of the work condition both Ben and
Sara satisfy the paid work test.

F7014 What is paid work?

Paid work means (1) work done for payment or in expectation of payment. It does not
include being
1. engaged by a charitable or voluntary organisation, or
2. a volunteer, in circumstances in which the payment received by or due to be
paid to the person is in respect of expenses.
1 UC Regs, reg 2(1)

F7015 Treated as in paid work F7010 F7025 F7025 F7025 F7025

A claimant will be treated as satisfying the paid work test in F7011.1 where, in
relation to that assessment period, the claimant
1. has ceased paid work
1.1 in that assessment period or
1.2 in the previous assessment period or
1.3 in the month immediately preceding the commencement of a new
award, but only where the assessment period in question is either the
1.3.a
first assessment period or
1.3.b
second assessment period
following the commencement of that new award (1) or
2. is receiving
2.1 SSP
2.2 SMP
2.3 ordinary statutory paternity pay
2.4 additional statutory paternity pay
2.5 statutory adoption pay
2.6 MA (2).
1 UC Regs, reg 32(2)(a); 2 reg 32(2)(b)

Example 1

Bill is receiving SSP whilst off work sick. He claims UC and his award commences
on 3.3.14. For the purpose of the work condition and any childcare costs that he may
still incur, Bill is treated as in paid work. Under this provision he can be treated as in
paid work for the assessment period that runs from 3.3.14. and for each assessment
period thereafter whilst he is receiving SSP.

Example 2

Stan ceased work on 18.7.14, he claims UC and his award commences on 28.7.14.
For the purpose of the work condition and any childcare costs that he may still incur,
Stan is treated as in paid work. Under this provision he can be treated as in paid
work for the assessment period that runs from 28.7.14 to 27.8.14 and 28.8.14 to
27.9.14. (this is because of the limitation imposed by F7015 1.3 ).

[F7016-F7019]

The childcare costs condition

F7020 General test F7010 F7025

The second condition of the childcare element requires that the claimant pays a
cost. This cost condition is met, in respect of an assessment period, where the
claimant has paid a charge for the relevant childcare of
1. a child
or
2. a qualifying young person (but only for a period up to and including the
assessment period which includes 31st August following the qualifying young
persons 16th birthday)
for whom they are responsible (1) (See ADM Chapter F1).
Note: The costs paid can include a charge for a deposit, advance or retaining fee.
1 UC Regs, reg 33(1)(a)

F7021 Relevant childcare F7035

Relevant childcare means that the childcare provider is registered or approved, for
example registered with OFSTED.

F7022

For childcare provided in England (1), the care is provided
1. by a person registered under prescribed legislation (2) or
2. under the direction of a proprietor of a school as part of the school's activities
2.1 out of school hours where a child has reached compulsory school age or
2.2 at any time where the child has not reached compulsory school age.
3.
by a person providing domiciliary care who is registered with the Care Quality
Commission

1 UC Regs, reg 35(2); 2 Childcare Act 2006, part 3;

F7023

For childcare provided in Scotland (1) the care is provided by
1. a person where the circumstances in which the care service provided by that
person consists of
1.1 child minding or
1.2
day care of children under prescribed legislation (2)
and is registered (3) or
2. a child care agency where the service is under prescribed legislation (4) or
3. a local authority where the care service provided consists of
3.1 child minding or
3.2
day care of children under prescribed legislation (2)
and is registered (5).
1 UC Regs, reg 35(3); 2 Public Service Reform (Scotland) Act 2010, Sch 12;
3 Public Service Reform (Scotland) Act 2010, part (5);
4 Public Service Reform (Scotland) Act 2010, Sch 12 para 5;
5 Public Service Reform (Scotland) Act 2010 ,part 5 & Sch 12;

F7024

For childcare provided in Wales (1) the care is provided
1. by a person registered under prescribed legislation (2)
2. other than certain prescribed care (3), in circumstances which the care would be
day care under prescribed legislation 4
3.
by a childcare provider approved in accordance with prescribed legislation (5)
4.
out of school hours, either by a
4.1 school on school premises or
4.2 local authority (whether on school premises or elsewhere)
5. by a domiciliary care worker under prescribed legislation (6)
6.
by a foster parent where
6.1. the care of the child is other than for the fostered child and
6.2
the care would be, but for the fact that the child is too old for
6.2.a. child minding or
6.2.b
day care
under prescribed legislation (7) .
1 UC Regs, reg 35(4); 2 Children and Families (Wales) Measure 2010, part 2;
3 Child Minding and Day Care Exceptions (Wales) Order 2010, art 11, 12 & 14;
4 Children and Families (Wales) Measure 2010, part 2; 5 Tax Credits Act 2002, s12(5);
6 Domiciliary care Agencies (Wales) Regulations 2004;
7 Children and Families (Wales) Measure 2010, part 2;

F7025

For childcare provided outside GB that registration or approval is by the Secretary of
State (1).
1 UC Regs, reg 35(5)

[F7026-F7029]

F7030 The childcare arrangement charges, described in F7020, need to be paid for the
purpose of enabling the claimant
1.
to take up paid work or
2. to continue in paid work or
3. where F7015 applies, maintain child care arrangements that were in place
when they
3.1 ceased paid work
3.2 started to receive the benefits listed (1) at F7015.2.
1 UC Regs, reg 33(1)(b)

Example 1

Ben is in receipt of UC. His benefit unit comprises of Ben, Sara and their daughter
Pauline and the assessment period runs from the 26th of each month. Ben works as
a cleaner for 2 days each week and pays 200 nursery fees at the end of each
month for Pauline's childcare; Sara does not work but is unable to look after Pauline
whilst Ben is at work because she is providing full time care for her disabled mother
who also lives with them. Ben is made redundant and his last day of work is 8.8.14.
Pauline is kept in childcare whilst Ben is unemployed because he is confident of
securing further employment in the near future and doesn't want to lose the nursery
place. Ben continues to satisfy the childcare costs condition, however if Ben remains
without paid work the payment of the childcare costs element will be restricted to the
end of the assessment period following the assessment period during which he
ceased work; in this case that would be up to 25th September (this is because of the
limitation imposed by F7015 1.2).

Example 2

Ben ceases work on 8.8.14 and makes his first claim for UC from 26.8.14, he
reports that he will still, whilst unemployed, be paying 200 a month nursery fees for
his daughter Pauline's childcare. For the purpose of the childcare costs condition
Ben satisfies this test. However if Ben remains without work the payment of the
childcare costs element will be restricted to the end of the second assessment
period following the month during which he ceased work; in this case that would be
up to 25th October (this is because of the limitation imposed by F7015 1.3).

F7031 Time limits to notify childcare costs

Providing that the notification of childcare expenditure is received by the DM within a
prescribed period the claimant can have, subject to meeting the other conditions at
F7010, a childcare costs element included in their UC maximum amount.

F7032

To be eligible for this childcare amount the DM needs to have received notification of
the amount of childcare costs that have been paid by the claimant within a period up
to and including the end of the assessment period that follows the assessment
period in which those costs were paid (1).
Note: the notification of the costs should also contain the childcare provider's
registration number.

1 UC Regs, reg 33(2)

F7033

Any notification of childcare expenditure after that period will not be eligible for re
imbursement.

Example

Amy incurs child care costs of 200 that she pays on the 30th of every month, her
UC assessment periods run from 10th of each month. For the amount Amy paid on
30th April to be included as childcare costs the DM needs to be notified of that April
expenditure before 10th June. If Amy reports her 30th April expenditure on the 10th
June or later it will be outside the prescribed notification period and be ineligible.
Note: Making the payment around the same date as the start of the assessment
period can make a significant difference to the notification period. If Amy paid the
childcare costs on 9th April (the last day of her assessment period) the notification
period will run to 9th May (just over 4 weeks) however if Amy could pay those
childcare costs a day later on 10th April (the first day of her assessment period) then
the notification period would run to 9th June (just over 8 weeks).

F7034 Excluded childcare

Certain childcare arrangements are excluded and as such the claimant is ineligible
for a childcare costs element. The type of childcare that is excluded is where the
care is provided by a
1.
close relative of the child wholly or mainly in the child's home or
2. foster
parent (1).
Note: the close relative is in relation to the child and not in relation to the claimant,
and so the child's grandparents would not be a close relative.

1. UC Regs, reg 35(7)

F7035

The care provided by a close relative in a place other than the child's home, perhaps
in the close relative's home, is an acceptable childcare arrangement (providing the
child carer is registered as in F7021).

[F7036-F7039]

Amounts

F7040 Childcare charge limit

[See ADM memo ADM 5 14] The amount of the childcare cost element, for any particular
assessment period, is limited to either
1. 70% of the charges for relevant childcare or
2. 532.29 where the care is for one child or
3. 912.50 where the care is for two or more children
whichever is the lesser amount (1).
UC Regs, reg 34(1)
Note: the amount at .2 is appropriate where the claimant pays in excess of 760.42/
month for the care of one child and the amount at .3 becomes appropriate where the
claimant pays in excess of 1303.57/month for the care of two or more children.

Example

Amy pays Cherub Nursery 750 a month in respect of the childcare costs for her
child. 525 is included in her UC maximum amount as a childcare costs element
(70% of 750). Later the nursery increases their fees and Amy is charged 775 a
month. Amy is now entitled to the maximum eligible as a childcare element, 532.29
(because 70% of 775 gives 542.50 which exceeds the maximum rate for one
child).

F7041 Excessive charges and reductions

The amount of childcare charges paid by the claimant should be reduced where the
DM considers those charges to be excessive when having regard to the extent to which
1. the claimant or
2.
where the claimant is a member of a couple, the other member
is engaged in paid work.

F7042

The amount of the reduction is the amount considered excessive (1).

1 UC Regs, reg 34 (2)(a)

F7043

What makes a childcare cost excessive is not prescribed and will be for the DM to
determine by having regard to all the circumstances including the claimants working
pattern compared to the corresponding childcare arrangements.

F7044

DM's should note, when deciding on excessive childcare charges, that
1. childcare charges may still be considered excessive even if they are less than
the maximum limit
2. the availability/suitability of childcare providers may warrant higher childcare charges
3. the location of the childcare provider in relation to the claimant's place of work
and the available transport options in-between may require longer periods of childcare
4. no account is taken of the level of the childcare charge per hour
5. reasonable travel time could be included in the extent to which the claimant is
engaged in paid work
6. comparisons with other registered child carers should not be made
7. school holidays, the age of the child/children or a disability can legitimately
increase the time needed for childcare
8. childcare may have to be purchased in blocks of time or sessions which can
legitimately increase the childcare costs.

Example 1

Carly reports paying 300 childcare cost per month to Royal Nursery who charge
30/hr. She does 10 hours work in the assessment period and therefore the costs,
although very high, are not excessive.

Example 2

Jane reports paying 840 childcare cost per month to Cherub Nursery who charge
15/hr. She works 10 hrs over 4 days each week. Although the charges represent 16
more hours than Jane works they are not considered excessive because she has
about one hours travelling from the nursery to work and a further hour back each
day.

Example 3

Warren normally works a rolling shift system covering 12 hrs over 4 days a week,
the days he is required to work changes from week to week. Warren pays 100 a
week to Sunshine Nursery for the costs of providing childcare over 5 morning
sessions each week. A comparison between the number of hours worked (12) to the
number of hours childcare is paid for (20) suggests 8 hrs or 40 could be excessive.
The DM makes further enquiries to establish the reasons behind the extra hours
care.
If it is because of Warren's reasonable travel arrangements the cost would not be
excessive.
If it is because the childcare sessions can only be purchased in weekly blocks (half
or full days) the cost would not be excessive.
If the childcare provider was sufficiently flexible to enable Warren to purchase
specific periods at short notice the cost would be excessive.
If the DM did consider the charges to be excessive the amount of Warren's childcare
cost element would be, in an assessment period that captured 5 payments,
500 (5 x 100) - 200 (5 x 40) = 300 x 70% = 210

F7045

The amount of childcare charges are also reduced by any amount that is met by
1. an employer or
2. some other person or
3.
payments out of funds (1) provided by the Secretary of State, Scottish or Welsh
ministers that are in connection with the claimant's participation in work
related activity or training (2).
1 UC Regs, reg 34(2)(b) ; 2, reg 34(3)

[F7046-F7049]

Childcare costs element extension period

F7050 Run on after death

Where childcare costs have been awarded but a child or young person for whom the
claimant is responsible dies the award can continue as if the child or young person
had not died until the end of the second assessment period following the
assessment period in which the death occured (1) .
1 UC Regs, reg 37
Note: If the parent does not have any childcare expenditure after the death of the
child then the run on will probably only consist of the child element.

Example

Steve and Janet are entitled to UC for themselves including an allowance for their
son Max. Each assessment period (that runs from the 10th of each month) Steve
claims a 500 childcare cost element in respect of the relevant childcare costs that
he had paid out at the end of the previous month. Max dies on 11.08.14. The
provider has a two month cancellation policy (regardless of circumstance) and so
Steve pays the appropriate fees for a further two months after Max's death. Because
of the run on rule the childcare element can be included for the assessment periods
10.09.14 to 9.10.14 and 10.10.14 to 9.11.14.

[F7051-F7064]

Definitions

F7065 Meaning of Proprietor

Proprietor (1) means
1. the governing body incorporated under prescribed legislation (2) or
2. the person or persons responsible for the management of the school
1 UC Regs, reg 35(6); 2 Education Act 2002, s19;

F7066 Meaning of school premises

School premises are premises that may be inspected as part of an inspection of the
school (1).
1 UC Regs, reg 35(6)

[F7067-F7080]

F7081 Close relative

A close relative in relation to a person means (1)
1. parent
2. parent-in-law
3. son
4. son-in-law
5. daughter
6. daughter-in-law
7. step-parent
8. step-son
9. step-daughter
10. brother
11. sister
12. where any of 1. - 11. is a member of a couple, the other member of the
couple.
1 UC Regs, reg 2

F7082 Qualifying young person F7083

A qualifying young person is a person who has reached the age of 16 but not the
age of 20 and who is
1. aged 16 years, but only for the period up to, but not including, the 1st
September that next follows their 16th birthday
2.
aged up to 19 years, but only for the period up to, but not including, the 1st
September that next follows their 19th birthday where they are enrolled on, or
accepted for
2.1 approved training (1) or
2.2 a course of education
2.2.a
which is not advanced education
2.2.b at a school, college or other establishment that is approved by
the Secretary of State
2.2.c
where they spend on average more than twelve hours a week
during term time in receiving tuition doing examinations or
practical work or supervised study
this must not include meal breaks or unsupervised study, including
homework, whether done on or off the premises of the educational
establishment (2).
3.
aged 19 and has been
3.1
undertaking a course of education or training or
3.2
accepted or enrolled for a course of education or training
before reaching that age (3).
Note 1: The education or training described in 3.1 and 3.2 does not include
education or training that is provided through a contract of employment (3).
Note
2: A person shall be treated as undertaking a course of FTE during the period
between the end of one course and the start of another where the person is
accepted for or enrolled on the latter course.
Note
3: Where a child or qualifying young person turns 16 or 19 on the 31st August
the period described at 1. and 2. will end on that same day.
1 Employment and training Act 73, s 2(1); Enterprise and New Towns (Scotland) Act 90, s 2(3);

2 UC Regs, reg 5(1); 3 reg 5(2); 3 reg 5(3)

F7083

Any person who falls within ADM F7082 is not a qualifying young person if they are
receiving UC, JSA or ESA (1).
1 UC Regs, reg 5(5)

F7084 School

School means a school that Her Majesty's Chief Inspector of Education, Children's
Services and Skills is, or may be, required to inspect (1).
1 UC Regs, reg 35(5A)

[F7085-F7999]