Universal Credit claimants could get additional support worth up to £522 from next month.
From June 28, maximum childcare payments for families on Universal Credit will rise by 50%, meaning people will be able to claim up to £1,630.
The increase is worth a total of £900 million across the UK, the Department for Work and Pensions (DWP) announced.
Families with one child will be able to claim £951, up from £646, while those with two or more will be able to claim £1,630, up from £1,108.
At the same time, the Government will help eligible parents cover the costs for the first month’s childcare when they enter work or significantly increase their hours, removing one of the most significant barriers to parents working and helping to grow the economy.
Those parents will also receive up to 85% of their childcare costs back before their next month’s bills are due – meaning they should have money to pay one month in advance going forward.
Mel Stride, Secretary of State for Work and Pensions, said: “These changes will help thousands of parents progress their career without compromising the quality of the care that their children receive.
“By helping more parents to re-enter and progress in work, we will be able to cut inactivity and help grow the economy.”
It comes as millions of Universal Credit claimants could also get a £600 a year boost to their savings.
The Help to Save scheme, a government initiative which encourages those on benefits to save money, has been extended until April 2025.
More than 359,200 customers have opened savings accounts since its launch in September 2018 and an additional 3 million individuals could still benefit from the savings scheme as a result of the extension.
Under the Help to Save scheme, for every £1 you put in to your Help to Save account, the government will boost it by 50p up to a certain amount.
If you put £50 each month until the scheme ends in April 2025, you would get £600 back in boosted funds from the government.
Setting up a Help to Save account online is quick and easy to do, and takes less than 5 minutes to sign up.
You can open a Help to Save account if you’re receiving:
Working Tax Credit
Child Tax Credit – and you’re entitled to Working Tax Credit
Universal Credit and you (with your partner if it’s a joint claim) had take-home pay of £658.64 or more in your last monthly assessment period
If you get payments as a couple, you and your partner can apply for your own Help to Save accounts. You need to apply separately.
Saving money though a Help to Save account could affect your eligibility for certain benefits and how much you get.
The Department for Work and Pensions guidance explains: “If you or your partner have £6,000 or less in personal savings this will not affect how much Universal Credit you get. This includes any savings in your Help to Save account.
“Your Help to Save bonuses will not affect your Universal Credit payments.
“Any savings or bonuses you earn through Help to Save will not affect how much Working Tax Credit you get.
“If you or your partner have £6,000 or less in personal savings this will not affect how much Housing Benefit you get. This includes any savings in your Help to Save account.”