From June 28, the maximum childcare payments parents can claim from the government will increase by almost 50%.
It will be the first childcare support package to go live after Chancellor Jeremy Hunt announced several reforms in his March Budget to help families struggling with the cost of living.
What exactly is changing?
The amount parents on Universal Credit in Great Britain can claim back monthly for their childcare costs will rise to £951 for one child, and £1,630 for two or more children.
It's an increase of 47% from the previous limits of £646 for one child or £1,108 for two or more children.
And eligible parents entering the workforce or significantly increasing their hours will get upfront help from the government to cover their first month’s childcare.
The Department for Work and Pensions says parents will get up to 85% of their childcare costs back before their next month’s bills are due.
This is to ensure they have money to pay one month in advance going forward.
Work and Pensions Secretary Mel Stride 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.”
What else is being planned?
As Chancellor Hunt said in March, the childcare reforms will be rolled out in stages.
From September, the hourly rates paid to providers to deliver free childcare for two-year-olds will increase by 30% from an average rate of £6 to £8.
From April 2024, 15 hours of free childcare will be available for working parents of two-year-olds.
The 15 hours of support will become available to parents of children aged nine months to the start of school available from September 2024 and it will rise to 30 free hours from September 2025.
Are there enough nursery staff to manage?
The Department for Education will launch a consultation on Wednesday aimed at increasing the early years’ workforce in England.
A recruitment campaign to attract and retain talent is also planned for early next year, which will consider how to introduce new accelerated apprenticeship and degree apprenticeship routes.
Minister for children and families Claire Coutinho insisted childcare shouldn’t be a “barrier to work”, adding: “But the expense has previously meant parents have had to choose between working or looking after their child.
“We are supporting families with the largest ever expansion of free childcare, making sure that places will be available for parents who need them.
"This will save a working parent using 30 hours a week an average of £6,500.
“We have already announced plans to boost the amount Government pays childcare providers, and now we’re knocking down barriers to recruiting and retaining the talented staff that provide such wonderful care for our children.”
Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know...