Best Use of Law

Nichola Salvato  the childcare Proof of Payment rule 

It seemed ridiculous that harder up families would only be supported after proving they had already paid.

The Campaign

When Nichola moved into full-time work she needed childcare for her then 10-year-old daughter but found she would be required to pay childcare costs upfront before she could claim them back through Universal Credit (the Proof of Payment rule).

Nichola had imagined that working full-time was going to be a positive step, meaning she would be better able to provide for her daughter and pursue her own career ambitions. Instead, to minimise childcare costs, she was forced to cut her working hours, reducing her monthly income and increasing her dependence on benefits.

Researching the problem, she found that the childcare support scheme for higher income families was available in advance. It seemed ridiculous that harder up families would only be supported after proving they had already paid.

She concluded that the rule was discriminatory to women, who were the most widely impacted, and in breach of the stated aims of Universal Credit ‘to make work pay’, ‘to remove barriers to work’, and to ‘incentivise working and working more’.

The Change

Leigh Day Solicitors agreed the rule was unlawful, and began the process of bringing a legal challenge. Nichola was granted permission for a Judicial Review, which she won. In his judgement, Mr Justice Chamberlain rejected the argument that the system as designed avoided fraud and concluded that the rule has disproportionate prejudicial effects on women.

Meanwhile, Nichola had joined the Save the Children ‘Make Childcare Work’ campaign. With other women in the campaign group, she met MPs, gave evidence to Select Committee enquiries, and had conversations at all-party round tables. Despite political support, the DWP seemed determined to frustrate any change to the rule.

Carolin Ott, solicitor at Leigh Day, said, ‘The Secretary of State committed to a ‘test and learn’ approach in rolling out Universal Credit yet refused to listen to the many campaigning organisations and individuals who have raised this issue for a number of years. Our client hopes that the Secretary of State will accept the ruling and take urgent steps to fix this perverse situation which, as noted by the Court, is a barrier to work and has disproportionately prejudicial effects on women.


The Future

The Government has now appealed the decision, which will be heard in July 2021. Nichola says she is confident that Mr Justice Chamberlain has not erred in his ruling and has fully understood the issue. If the decision is upheld, more than five hundred thousand families could benefit from a change in the rule.

Many struggling families affected by the rule have reached out to Nichola for advice. In December 2020, she founded a Community Interest Company called Parent Poverty, which provides a free casework service to single parent families that need help or advice challenging a public body decision, from evictions and housing related issues to benefits and benefit appeals at tribunal.

She is in the process of securing funding for the service, though has generated a small amount of income for Parent Poverty from the sales her book ‘How to Win Your School Appeal’.

She hopes the work of Parent Poverty will also contribute to the national conversation about poverty and single parenthood, with research and insight gained through its front-line service.

Who else was involved?

The legal team at Leigh Day, headed by Carolin Ott, and barristers Chris Butler and Jessica Jones at Matrix Chambers. Save the Children offered advice and championship that Nichola says ‘has kept me going at challenging moments when it all seemed overwhelming’.

Nichola gathered a large body of evidence to support the challenge from Save the Children, Gingerbread, the Professional Association for Childcare and Early Years (PACEY) and the National Day Nurseries Association (NDNA), as well as several individually effected single parent mums.

Their evidence supported the argument that payment for childcare fees upfront was vital for working parents and childcare providers alike and that the current system puts families in significant hardship and debt. Their evidence also showed that the payment system was a barrier to working and progressing in work for single parents and single mums in particular.