Struggling parents will get a boost of 50 per cent to their childcare payments in this year’s Budget, designed to help with the current cost of living crisis and increase the number of workers in the labour market.

The Chancellor, Jeremy Hunt, will increase the amount parents on universal credit can claim back on childcare, from £646 for a single child to £950 and from £1,108 for two children to £1,630, according to The Times.

This is nearly a 50 per cent increase.

The maximum level has been frozen since 2006 despite inflation soaring, leaving parents with a large real-terms cut.

Currently those on universal credit and eligible for support pay for childcare upfront and then claim a refund.

However, it has been reported that this will change to parents being offered upfront payments in the hope it will encourage more people to make claims.

The Government also hopes this will encourage more parents back to work.

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Childcare prices are prohibitively expensive in Britain with the average cost of a full-time nursery place for a child under two nearly £15,000 a year, according to a recent report.

A study from Coram Family and Childcare found the average price of a childcare place for 25 hours a week is now £150.89 per week in England with the high costs “freezing parents out of work”.

A separate survey from the National Day Nurseries Association recently published shows that 98.4 per cent of nurseries in England say their funding rates do not cover delivery costs.

Labour has recently criticised the Government for failing to provide sufficient support for childcare.

Bridget Phillipson, the shadow Education Secretary, said she wanted to “move away” from the current system of free childcare provision, saying “bolting on” more hours would not solve problems of availability or affordability.

Speaking at an event hosted by centre-right think tank Onward, Ms Phillipson said: “What we need is not tinkering, but a bold and ambitious vision of how things can be better.”

But she did not lay out the specifics of what Labour would do, beyond the policy of providing breakfast clubs in every primary school that she announced at the party conference in September.

What childcare support is currently available?

In England, parents can get currently 570 hours of free childcare a year, equating to up to 15 hours a week, for three to four year olds.

However, some can apply for an additional 15 hours’ worth of childcare a week, bringing the total up to 30 hours.

Eligibility depends on a number of factors, namely, if you are working, your income and circumstances, and your immigration status.

For example, to qualify each parent needs to expect to earn at least £1,976 over the next three-month entitlement period if they are aged 23 or over, unless on maternity leave or sick leave.

Meanwhile, working families who qualify for universal credit can claim back up to 85 per cent of their monthly childcare costs.

At present, the most you can get back is £646.35 a month for one child and £1,108.04 a month for two or more children, although this is likely to be increased in next week’s Budget.

If you already claim tax credits, you can also add an extra amount of Working Tax Credit to help cover the cost of childcare.

You can apply for the childcare element of Working Tax Credit if you work at least 16 hours a week (if you’re a couple, you both need to work at least 16 hours a week) or pay for registered or approved childcare. You can get help with up to 70 per cent of your childcare costs.

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