Parent to be

beer_tins

Hi all,

I'm due to become a Dad in October, so I thought it's time to work out what will happen financially. I'd be grateful for some opinions and to be pointed in the right direction.

I understand child benefit is £20 a week (first child), so that's fine.

My wife will be on Statutory maternity pay. I believe her company pays 100% for the first 6 weeks and she'll get £123.06 for the following 39 weeks.

I will take statutory paternity leave for the first 2 weeks. My company pay 100% for the first week, second week will be £123.06 (statutory).

I earn a decent salary, but am not a higher rate tax payer. I'm not sure how to work out if we qualify for Child tax credits.

And is there anything else to consider? I know about the child trust fund and I will of course apply for my child.

I'm not sure if we qualify for working tax credits once my wife is on statutory maternity pay? We would still have an above average family income, so I'd assume not.

Any help is much appreciated!

karenx

Use this site entitledto.com and input your figures as if the baby is already here.
Working tax credits you will get if work more than 16hours per week and total income doesnt exceed 17k per year.
You will get help with childcare if both working over 16hours once your wife goes back to work, but again this depends on your total income also.

beer_tins

karenx wrote: »

Use this site entitledto.com and input your figures as if the baby is already here.
Working tax credits you will get if work more than 16hours per week and total income doesnt exceed 17k per year.
You will get help with childcare if both working over 16hours once your wife goes back to work, but again this depends on your total income also.

Thanks, I will check there. I guess I need to enter it as if my wife is on Statutory pay and work out what she had earned up to that point? It's a little confusing, because she will be earning a salary for part of the year. I'm sure I'll work it out.

Looks like we can forget about working tax credits.

Will look at childcare too, but like you say, might not qualify. My company does the "busy bees" childcare vouchers that you can use to pay for childcare from your pre-tax income, which will help.

karenx

Try this site to work out if you are better claiming childcare vouchers or tax credits http://www.hmrc.gov.uk/calcs/ccin.htm
Yes just work out a rough estimate, doesnt have to be to the exact £. Then use her figure and yours and see what it comes up with in regards to child tax credits. It will give you 2 figures at the end. A weekly one and a yearly one. Go with the weekly figure as an estimate of what you will get as the yearly one will just tell you what it would be from now till the end of the tax year which is in 2 weeks

beer_tins

karenx wrote: »

Try this site to work out if you are better claiming childcare vouchers or tax credits http://www.hmrc.gov.uk/calcs/ccin.htm
Yes just work out a rough estimate, doesnt have to be to the exact £. Then use her figure and yours and see what it comes up with in regards to child tax credits. It will give you 2 figures at the end. A weekly one and a yearly one. Go with the weekly figure as an estimate of what you will get as the yearly one will just tell you what it would be from now till the end of the tax year which is in 2 weeks

Thanks very much! They don't make it easy, do they?

beer_tins

Hmm, no idea of what my childcare costs are going to be. Will have to find that out first. But seeing as my wife won't work for the remainder of the 2010/2011 Tax year, I assume I can use 0 to work it out.

karenx

Try different senarious out, ie try £100 per week. For 1 child the max they will pay is £180 per week.

beer_tins

I think I've answered my own question RE: childcare vouchers vs. tax credits.

After my child is born, my wife will not return to work, or use paid childcare for the remainder of the tax year. So in our case, it would be tax credits, even if it doesn't amount to that much. At least for next year. Or have I missed something?

Thanks again all, for your input.

karenx

You still get child tax credits. There is 3 parts to tax credits. Child tax credits which goes on your income. Working tax credits if working over 16hours but not earning more than 17k. And childcare tax credits which goes on your income also. You will be entitled to child tax credits. But for working out if you will be better of claiming the childcare element or vouchers from your employer then use the site I said above. But worry about that nearer the time your wife is going back to work

beer_tins

OK. Thanks again for your help.

Assuming we won't get childcare tax credits for 2010/2011, we will only be entitled to £14.28 in child tax credits. For the year! Hardly worth filling out the form!

When my wife goes back to work in 2011/2012, it may well be the case that childcare vouchers work out more worthwhile.