Benefits and help for working parents
Work plus family is a complicated equation financially because there are all sorts of costs involved in raising children, not least of which is childcare.
There are some state benefits that all working parents are entitled to, and others which some parents qualify for, depending on their income.
But considerable changes are afoot - the government plans to replace all working age benefits and tax credits with a single Universal Credit. It's set to run alongside a new Work Programme. But until those changes take effect...
Maternity pay kicks in from when you start your maternity leave, but it doesn't necessarily continue for all the time you're off work, as you'll have discovered.
So, belt-tightening is the name of the game for most new parents - especially during maternity and paternity leave, and on into the future (for ever, really).
"For us the extra costs of having a child were about 10 to 20% of total previous costs. There are lots of variables, including how much of your old lifestyle (eg going out) disappears, and for how long; plus, whether you're going to dress the new arrival in hand-me-downs or designer gear. But for us, at least, the overwhelming financial factor was the loss of an income for many months, not the increased costs." slhilly
Don't despair: not being at work means you'll save money on, for example, travel and lunches and drinks in the bar at the end of a tough day (some of your days will still be tough, but there's less likely to be a trip to the pub at the end of them now you're a new mum).
Going back to work
Key dates for work and money
Also, a bit of financial help is at hand in the form of child benefit and, for those on low incomes, family tax credit.
But please note if you're new to working parent-dom that the benefit structure is set for a major overhaul: the government plans to replace all working age benefits and tax credits with a single Universal Credit. It's set to run alongside a new Work Programme.
From January 2013, households where at least one person earns more than £50,000 will have their child benefit means-tested. Depending on their income, child benefit will either be stopped or clawed back through extra tax payments.
If this is your first baby, you'll receive around £20 a week; for second and subsequent children, around £13 a week. For the exact current amount, see Directgov.
Child benefit makes a big difference to many families' monthly income; there was widespread dismay on Mumsnet when the government announced its changes in 2010. But if you're new to parenting, it's going to be important to take into account that it won't continue past 2013, if you or your partner pays higher rate tax.
"When child benefit goes, and after childcare, I'll have £50 left for working full-time. I know Child Benefit is not that much but it DOES help and make it seem a little worthwhile going to work! Apart from Child Benefit, I have never claimed benefit in my life. Child Benefit helps me afford to be able to work and put money back into the system. Without it I may just as well stay at home!" Poogles
Childcare vouchers are a government scheme that allow you to pay for childcare from your pre-tax salary. The scheme is operated through employers.
You can claim childcare vouchers from the day your child is born, through your wages, or your husband's or both. You don't have to wait till your child starts to go to a nursery or childminder.
Make sure you check how long the vouchers last before they expire - Mumsnetters say e-vouchers last longer than paper vouchers.
And one Mumsnetter warns: "You might want to take a break from vouchers for the few weeks that your employer calculates your pay for the purposes of your your maternity pay - that way your maternity pay will be calculated on your actual pay."
Also worth noting is that if your family income is less than £42,000 a year, getting childcare vouchers reduces your eligibility for tax credits. So you need to work out how much you could be eligible for from tax credits before you decide about childcare vouchers.
Update: The new Tax-free Childcare Scheme will supercede this when it comes into force in 2015.
Tax credits are actually benefits ie government payments. If you work more than 16 hours a week, or are in a couple where you both work more than 16 hours a week, and are responsible for at least one child under 16, you may be eligible depending on your (joint) income.
If you work but are on a low income, you may qualify for working tax credit. Some parents may qualify for both sorts of credits.
To find out whether you're eligible for tax credits, and what to do if you are, use this questionnaire on the government's Directgov website.
In that case, you won't have to pay back any Statutory Maternity Pay.
But if you got more than SMP, check the small print of your company's policy - you may have to pay back some of the extra money if you don't return.
All three and four year olds are entitled to 15 hours of free nursery education for 38 weeks of the year. This applies until they reach compulsory school age (the term following their fifth birthday). Free nursery education can take place in nurseries, playgroups, preschools or at childminders.
For more information about free nursery education in your area, contact your Family Information Service (FIS) online or call 08002 346 346.
Last updated: 3 months ago