The government says an extra 80,000 low income families will be eligible for help with the costs of childcare under new plans.
Parents on low incomes who work less than 16 hours a week will be able to apply for financial help with childcare from 2013.
Ministers said the payments, costing £300m-a-year, should make it easier for parents from an estimated 80,000 households find work.
Labour warned the move would do nothing to help thousands of families struggling to make ends meet as a result of the cuts to childcare support in last year’s comprehensive spending review.
It comes at a time when David Cameron and the Conservative half of the coalition come under fire over their attitudes towards women.
Mr Duncan Smith said that the change would help parents to work the hours that that suited their families.
“We are determined to help more parents take their first steps into work, but under the current minimum hours rule parents are trapped in state dependency without the childcare support they badly need – providing yet another barrier to work,” he said.
It won’t mean a penny more help for parents already struggling on childcare tax credits. Liam Byrne
“Under universal credit more people will receive support for childcare than they do now. Parents will be able to work the hours to suit their families and receive the childcare support they deserve.”
Mr Clegg said: “Childcare support is vitally important. It’s a lifeline for families up and down the country, particularly for mums who want to get back into work, maybe for just a few hours a week after they’ve had children.
Read more: quarter of parents in debt over childcare
“We all know how difficult it is sometimes to juggle family and work but this is really good news, especially for lone parents and mums up and down the country.
“I want to ensure that this coalition government is there for families of all shapes and sizes and help them with the difficult daily juggling act between family and work.”
Under the plans, families will be able to recover 70 per cent of their childcare costs, up to £175-a-week for one child and up to £300 for two or more children.
Shadow work and pensions secretary Liam Byrne said that parents were already being forced out of work as a result of the government’s decision to cut childcare support from 80 per cent to 70 per cent.
“Today’s announcement is frankly smoke and mirrors. It won’t mean a penny more help for parents already struggling on childcare tax credits,” he said.
“Universal credit is now set to lock in a ‘parents’ penalty’ that cuts back childcare payments so hard that many parents will be forced to give up work.
“With parents struggling to make ends meet, it beggars belief that the Tories are stopping parents working the hours and shifts they need by taking away their childcare.
“The Tories are out of touch with most people’s lives and unable to address the big challenges facing Britain in the future.”