Having a baby is expensive – there’s no doubt about it. On top of this, parents are face a dilemma: should they stay at home to look after their child or return to work and arrange childcare? This is a decision that must take your finances into consideration.
Any financial help you can get is worth investigating. From Child Benefit and Child Tax Credit, to Childcare Tax Credits and Childcare vouchers, you should check what you’re entitled to. There could be all sorts that could make the transition to parenthood financially easier.
Here's a look at what benefits and other help you can find.
Preparing for the arrival of a baby is stressful as it is, and the last thing you want is to be worrying about is how you’ll afford basic living expenses. Thankfully, maternity pay can really help with the cost, by granting you funds for before and after the birth.
You'll be eligible to claim for SMP if you've been in the same job – as an employee – for at least 26 weeks. You’ll also have to claim by at least 15 weeks before your baby is due. Plus, you'll have to be earning at least £90 a week before tax.
For the first six weeks of your pregnancy you can get 90% of your average earnings as maternity pay. After that point you'll get £151.97 per week for the next 33 weeks – or 90% of your weekly earnings – whichever is lower. This means you’ll receive payments for up to 39 weeks in total. Your employer will pay these in the same way they'd pay your salary.
Your employer then claims this back from the Inland Revenue. You don't have to pay any of it back yourself, even if you don't return to work after maternity leave.
To get your maternity pay simply ask your employer, and they’ll make the necessary arrangements. However, remember to give the correct notice of your maternity leave to them. At the latest, this needs to be by the end of the 15th week before your expected due date.
Some employers do pay more than SMP, but this is at their discretion and is not linked to the government’s payments.
If you’re self-employed, you won’t qualify for SMP. Instead, you may be able to claim Maternity Allowance every two to four weeks.
If you’re eligible, you can claim this from 26 weeks into your pregnancy. Payments can begin from 11 weeks before your due date. You’ll get either £151.97 per week, or 90% of your average weekly earnings, whichever is lower. You can claim this for 39 weeks.
Alternatively, you could get £27 a week for 39 weeks or £27 a week for 14 weeks. It all depends on your circumstances.
You can find out more on Gov.uk.
If you’re a dad, you could be eligible for Paternity Pay. You can take one or two weeks off, all in one go, and it can only start once the baby’s born.
You’ll get £151.97 per week, or 90% of your average weekly earnings, whichever is lower. It’ll be paid in the same way as your wages and tax and National Insurance will be deducted.
As with SMP, you must be an employee to claim this and you must have been in the same job for 26 weeks before the ‘qualifying week’. The qualifying week is 15 weeks before the due date.
There’s also an option to take Shared Parental Leave and receive ShPP. This is where both parents split up to 52 weeks of leave between them.
Mothers can share their allowance with their partners and return to work more quickly, if they wish. Before, mothers had to wait until 20 weeks after the child was born before passing on some leave to her partner.
You should qualify for this as long as you’re both employees and have been in the same employment for 26 weeks by the qualifying week. That’s 15 weeks prior to the due date. You must also each earn at least £120 and have shared parental responsibility from the birth.
ShPP is £151.97 a week or 90% of your average weekly earnings, whichever is lower.
You can get Child Benefit for each of your children, up until they reach 16. It can carry on until they’re 20 if they stay in full-time education. There’s no limit on how many children you can claim for.
In some areas, this will be paid as part of a single universal credit if you receive other benefits too.
The amount for an eldest or only child is £20.15 every four weeks. For additional children, you could get £14 every four weeks.
Only one parent can claim, unless you split up and some children stay with you and others live with your partner.
If you or your partner earn more than £50,000, you may have to pay a tax charge. You can find out more on the Gov.uk website.
Child Tax Credit is also available if you’re already claiming the Working Tax Credit. You don’t have to be working. However, new claims are no longer being taken – you have to apply for Universal Credit instead.
If you do get Child Tax Credit, it’s available for children under 16 that you’re responsible for. The amount of tax credit you have can be subtracted from the amount of tax you owe. The amount of Child Tax Credit you get depends on when your children were born and your household income.
Claiming Child Tax Credit won't affect your Child Benefit payments.
If you already claim Child Tax Credit, you can add Working Tax Credit to your claim.
You have to be responsible for a child, on a low income, and work a certain number of hours per week, depending on your age.
If you're entitled to Childcare Tax Credits, they'll provide up to £122.50 per week for one child or £210 per week for two or more.
How much you get will depend on what you earn - you can check on the Gov.uk website.
The government’s childcare voucher scheme has closed to new applicants, but your employer may offer a salary sacrifice scheme. This will allow you to use part of your pay to purchase childcare vouchers. You won’t pay tax or National Insurance on that amount. This can be helpful to working parents.
The scheme was replaced in 2017 with a new Tax-Free Childcare Scheme. For every £8 you pay into your childcare account, the government will add £2.
The Sure Start Maternity Grant is a one-off payment for people on lower incomes that you don't have to pay back. You'll be given £500 for each baby.
You'll have to be in receipt of one of the following benefits to be eligible:
Employment and Support Allowance
Child Tax Credits that are at a higher rate than the family element
Working Tax Credit where a disability element is included in the award.
To get your Sure Start Maternity Grant you'll need to fill in this form. You'll be able to claim the grant if you're expecting a baby within 11 weeks, or if you've given birth within the last three months.
If you live in Scotland, you’ll have to apply for a one-off Pregnancy and Baby Payment instead of a Sure Start Maternity Grant.
Ask your midwife for a Maternity Exemption Form. This will entitle you to free prescriptions for the duration of your pregnancy, and for a year after your baby’s born.
As long as you’ve got an NHS dentist, you’ll receive free dental care during your pregnancy and for a year after your baby’s born. You can use a Maternity Exemption Form, available from your midwife, for this.
You’re legally entitled to paid time off work to attend your antenatal appointments. This could include midwife appointments, scans, antenatal classes and other medical appointments.
It doesn’t matter how long you’ve been employed – every woman is entitled to this.
Your partner is legally entitled to time off to attend two of your appointments, but this doesn’t legally have to be paid time off.
As well as help from the government, see what help you can get from family and friends where you can. For example, grandparents may be willing to help with regular childcare. Or a friend could be happy to give you an occasional break by looking after your child.
For more information on what new baby benefits are available, use the benefits calculator on the Entitledto.co.uk website.
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