New parents looking for guidance

steveM1978

Hi

My wife is due to drop in the coming week or two with our first child and no doubt I will need to start filling out forms so we can claim some money. My wife is a director and is paid mainly in Dividends; I am employed and earn a salary. We are home owners and she is planning on going straight back to work after the baby is born. I will also be working so between parents and nursery the child will be in full time care. (She is due in 5 days and is still working now!)

She earns £6,500 a year and a Dividend of about £20,000 to £25,000 a year
I earn £20,000 a year.

What if anything will we get? IF she decides not to go back to work and she then gets statutory pay of about £150 then I will be the sole earner at £20k that wont pay my mortgage and council tax! Will we need to move and go on the dole (and get housing) in order to make ends meet? (a bit extreme i know, but in the current state of the country i cant believe it is actually an option!)

BAFE

As things stand at the moment you would be eligible for child benefit.

It doesn't make sense for her to give up work. As the lower earner, you would both be financially better off if you were to be a SAHP.

tooldle

I may not be quite up to date with this but feel sure that I have read that dividends are not taken into account for tax credit purposes. Might be worht looking into this further

Oldernotwiser

Even if they're not taken into account (and I agree that they should be) I can't understand how the OP can talk about having difficulty in making ends meet on only his income of £20,000.

steveM1978

My Mortgage and associated bills (council tax, Water rates, Electric and gas) come to £1500 a month, I take home £1333 a month. Without my wife’s salary it would be difficult.

In terms of Earning, I have recently started a new career and my potential earning in the next few years could triple. My wife’s earnings won’t change so it is probably worth me perusing my career to see how that pans out.

The reference to the dividend payout being taken in to account is interesting, can anyone confirm? That was a thought that I had as they are not guarenteed and are performance related. (targets and goals)

As for dividends being taken in to account, I can think of hundreds of people who get money that Shouldn’t for many reasons, this is a society problem. My wife and I have never been unemployed, never ill or in hospital. We have paid our contributions for many many years! I will need help with my mortgage payments probably until my wife can get back to work at least. It is “unfair” etc that people get this paid for (£400 per week in London I believe), until we have a benefit reform this country is fighting a losing battle!

Mean while how much can I get!! haha. Anyone have any ideas of figures as I am trying to budget my finances. We had saved a couple of thousand but the car broke last week and we got a £4k bill from Vauxhall! I have been told its £20 a month, if this is correct then we are in trouble and I will need to look at drastic measures now to prevent any issues of losing the house.

NEH

For working tax credits you do have to declare dividends, as well interest from bank accounts etc unless it's a PEP or Isa and then you don't as they're tax free....

I believe it's classed as other income and you take off the first £300 of it...

I take it you didn't have a budget planned out out before the child came along?

I don't know about child tax credits...

steveM1978

No not a budget as such, we have had the house for 3 years now (tied on to this mortgage for another 18 months) so i can budget all i like but it wont make the mortgage go down or my wages go up!

The reality is that my wife is going to have to go straight back to work, 2 weeks off then back. It is a pain as i am sure she would like a little longer with the baby. Child care is also so very expensive though.

Like I said before we would actually be better off to both go on "job seekers allowance" and get child care, rent and our spending money for doing nothing.

Where do I go or who do I see about tax credits (used to be called family allowance)?

NEH

steveM1978 wrote: »

No not a budget as such, we have had the house for 3 years now (tied on to this mortgage for another 18 months) so i can budget all i like but it wont make the mortgage go down or my wages go up!

The reality is that my wife is going to have to go straight back to work, 2 weeks off then back. It is a pain as i am sure she would like a little longer with the baby. Child care is also so very expensive though.

Like I said before we would actually be better off to both go on "job seekers allowance" and get child care, rent and our spending money for doing nothing.

Where do I go or who do I see about tax credits (used to be called family allowance)?

http://www.hmrc.gov.uk/taxcredits/

With working tax credits you have to earning under £18,000 but as i said i don't know what the threshold is for child tax credit...

You wouldn't necessarily be better off....If you own a property (even paying off a mortgage) then you're not entitled to housing benefit or council tax benefit...You may get help towards the interest only part of the mortgage on job seekers but i know my friend had an awful battle with it....

Also i believe if you quit your job to go on it there are certain rules for that and you may not get it in the first place, though i may be wrong...

You also have to attend at the job centre once a week and fill in forms to prove you are looking for work, such as what intereviews you've attended and where you've looked for work etc...

Presumably you've cut out all things such as sky etc....

BAFE

steveM1978 wrote: »

Like I said before we would actually be better off to both go on "job seekers allowance" and get child care, rent and our spending money for doing nothing. ?

Do that then, if you'll be better off.

I've been on Job Seekers Allowance - it's flucking brilliant! I used to stay at home ordering food from Harrods whilst sending my butler out to pick up me giro

steveM1978

yeah, dont have sky and stuff. to be honest we are not too worried about our finances as we will both be coming back to work so we will cope, it just seems like we will get nothing because we MUST BOTH work in order to maintain any standard of living. also it is just luck that the mother in law is retired and willing to help out where she can. the fact that we will get £0 or close to it is very annoying. I would never quit my job in order to go on the dole etc and neither would my wife but sometimes i just feel like "opting out" of this country and the backwards way of doing things, punish the workers reward the long term unemployed!

Where do i go in order to fill out paperwork for any allowances?

NEH

steveM1978 wrote: »

yeah, dont have sky and stuff. to be honest we are not too worried about our finances as we will both be coming back to work so we will cope, it just seems like we will get nothing because we MUST BOTH work in order to maintain any standard of living. also it is just luck that the mother in law is retired and willing to help out where she can. the fact that we will get £0 or close to it is very annoying. I would never quit my job in order to go on the dole etc and neither would my wife but sometimes i just feel like "opting out" of this country and the backwards way of doing things, punish the workers reward the long term unemployed!

Where do i go in order to fill out paperwork for any allowances?

As one of those long term unemployed due to long term ill health trust me we aren't all like those in the Daily Mail and some of us desperately want to get back to work so we can have some money again....Add the recession onto things and there are an awful lot on less than your £20,000....

You've already been given the link....