A single mum is taking the DWP to the High Court over Universal Credit childcare rules that forced her into debt.
Nichola Salvato – a professional benefits advisor – could help up to half a million parents on the six-in-one benefit if she wins her landmark legal fight.
She is asking for a judicial review of rules that force UC claimants to pay up-front for childcare.
Parents on UC can get up to £646 per month for each child under 16 to fund 85% of their childcare costs. But they must pay up-front and claim the costs back later, which leaves some facing four-figure bills.
The Department for Work and Pensions (DWP) says the policy is to prevent fraud.
But Nichola’s formal legal claim, backed by Save the Children, alleges the rule is unlawful, discrimination and breaches the European Convention on Human Rights
The 48-year-old, who lives with daughter Sofia, 11, in Portslade, was stung when she moved from Citizens’ Advice to a full-time job with a housing association in September.
She was forced to cut her hours and borrow £2,000 from payday lenders and family to cope with childcare costs.
She told the Mirror: “I have struggled since July.”
The childcare cash pays for after-school clubs for Sofia. But Nichola couldn’t get extra DWP help to stump up an advance payment, because she had earned more than £2,600 in six months.
Nichola, who has a degree and expertise on the benefits system, added: “I wouldn’t finish work until 5pm and it was a 45 minute commute.
“I try to think what it’s like for families or lone parents with a child before nursery age.
“If I can’t figure my way out of this then how is anyone else going to?
“I guess I thought I would be able to get some kind of help in advance for the child care costs. I knew that under the Tax Credits system I could apply in advance.
“I have had to borrow and couldn’t have any luxuries.”
Nichola said she would have been faced with a £1,700 bill in one month if she had not cut her hours.
Some 50,000 households including 42,000 single parents were claiming childcare costs under UC last August.
But the number is rising all the time as more people join UC, and is expected to eventually reach as high as 500,000.
Nichola is seeking permission for judicial review of the law.
A decision on whether her case can proceed to a full High Court hearing is expected in the next five or so weeks.
Her legal action says the childcare policy “disproportionately adversely affects women” and “disadvantages parents who lack the funds to pay the upfront costs of childcare.”
Branding the policy “irrational” under the law it adds: “It stands in stark contrast to the way in which other components of Universal Credit are paid.”
Save the Children head of UK child poverty Becca Lyon said: “The way childcare is paid for through Universal Credit causes unnecessary hardship to parents on low incomes – the majority of whom are single mothers.
“Mums tell us that this has left them constantly in arrears.
“They’ve had to take out loans to pay nursery bills, turn down job opportunities or even resort to food banks to feed their children. It’s just not right.”
Carolin Ott of law firm Leigh Day, which is representing Nichola in the Legal Aid-funded claim, said Tory minsters had “refused” to change the policy despite “clear evidence” it is a barrier to parents.
She added: “Single parent families and therefore women are disproportionately affected and our client’s case is that the policy is both irrational and discriminatory.”
The DWP said it was unable to comment on an ongoing legal case.