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Benefits for families
Mothers of babies born after 1 April 2007 can get compulsory maternity pay for nine months. Payouts count as money earned, so you will be expected to pay tax on these. If at the end of the maternity leave, you decide not to work, you can still keep the money. There are two types of maternity benefits available: Statutory maternity pay (SMP) This is a weekly payment from your employer. You are entitled to this for up to 39 weeks, and the earliest it can start is 11 weeks before your baby is due. There will be certain conditions based on how long you've been working and how much you earn. If you do get SMP your employer will pay you 90 per cent of your average weekly earnings for the first six weeks, then up to £117.18 for the remaining 33 weeks. Maternity allowance (MA) This is a weekly payment from Jobcentre Plus. You may be eligible for this if you have been employed or self-employed for some time during and before your pregnancy. The standard rate of MA is £117.18 or 90% of your average weekly earnings (whichever is less) and is also paid for 39 weeks. Visit the Department for Work and Pensions or Entitled To to learn more. Statutory paternity pay (SPP) If you are a working father, or the partner of a woman having a child (including a same-sex partner), you may be able to get statutory paternity pay for two weeks during your paternity leave. You can also get statutory paternity pay when you adopt child. Fathers are entitled to either £117.18 a week or 90% of the average weekly earnings (again whichever is less) if they earn over £90 a week. If you get housing benefit, council tax benefit or tax credits when you are working, you may be entitled to income support during your paternity leave. Get some free help from the Citizens Advice Bureau. To search for details of your nearest CAB, search here. If you have been employed by the same company for a year, there are some benefits which allow BOTH parents to take 13 weeks unpaid leave for each child. This new ‘parental’ leave can be taken at any time until the child reaches five years old, so it doesn't strictly come under maternity rights. However, you could use it to extend your time off work without losing your right to return to work. Parents with a disabled child (who is getting disability living allowance) are entitled to 18 weeks unpaid leave until their child's 18th birthday. Parental leave is taken in one week blocks. You will also have to give your employer 21 days' notice. No more than four weeks leave for any one child can be taken in a year. Another thing to note is that any unclaimed parental leave can be carried over to a new job and will kick in once you've been there for a year. This is a tax-free monthly payment for anyone bringing up a child under 16, or older if they’re still in education or training. It isn't affected by income or savings so most people can get it. You will receive £18.80 per week for your eldest child, and £12.55 for each additional child per week. You should claim child benefit as soon as your child is born, or as soon as a child comes to live with you. You can download a claim form from the HM Revenue & Customs website. The idea of tax credits is to reward your willingness to work. There are a lot of people who feel it better to receive money for doing nothing. This scheme is designed to try to change that attitude. You don’t have to be on a low income to claim tax credits. Tax credits and child benefit generally go to the main carer, which means where parents are separated it will generally be the mother who can apply. Check out the government's tax credit site for more info. Those between the ages of 16 and 18 can still receive benefit, if not in school and working part-time, so long as they don’t exceed more than 24 hours work per week. You can receive financial aid for children up to the age of 18, as long as they’re in full-time education. Child tax credit comes in two parts: The family element: This is a lump sum paid to the family to cover the whole year. The child element: This is paid out to each child you have and the amount can vary depending on your income. The less you earn and the more children you have, the more benefits you will receive. You can also claim extra if your child is disabled. See here for further details. WTC is to help those who don’t earn very much from their jobs and can vary depending on how much you work and your personal situation. You must be 25 years old or over and work at least 30 hours a week to claim, unless you are disabled, over 50, or a parent, in which case you only need to work 16 hours a week. Parents can also claim up to 80% of childcare costs. For information on tax credits, call the Inland Revenue tax credit help line: 0845 300 3900 or claim online. You can also find out more at Direct Gov. Childcare vouchers Childcare voucher schemes provide vouchers that can be used to pay for any type of childcare. If an employer joins the scheme, they can then offer to pay their employees a proportion of their pre-tax salary (no more than £243 per parent a month) in childcare vouchers which can be spent on childminders, playgroups or any sort of childcare that is registered with Ofsted. The main attraction of these vouchers is that you don't have to pay tax or national insurance on them, so for every £100 of salary that you exchange, you get £130 in vouchers. For more information see our article on childcare vouchers and here for more information. Useful Links Related articles
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Jasmine & Moneymagpie team
Moneymagpie Moneypedia
09.05.2008
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