To pay myself extended maternity leave and then claim UC?

[ANightingaleSang]

I am a single mum with a 7 month old.
Ex military, worked my whole life and very keen to get back into work. Unfortunately I just can't afford childcare. I have no family support so would have to use nursery or a child minder (most likely option). A full time childminder costs upwards of £1300 per month in my area, nursery even more. I have been receiving maternity allowance which is approx £700 per month, but this ends in November and after that I will have no income).

I am expecting to receive a settlement payment soon (not sure when, nor how much, but this will most likely bring my savings to the £20k mark).

I am retraining and will be starting work at a lower grade (think £30k for the first 18 months before tax). I will be very stretched to pay rent, bills and childcare, let alone food. I'm trying to figure out the best way to approach this.

The best solution I can think of is this.
In November start using my savings (which are around £10k currently) and pay myself a "wage" to extend my maternity leave. After receiving the settlement, continue to do this for a year.

Once DD is eligible for free childcare hours (at that point my savings will be below £16k so I would be eligible for UC top up/reduction on childcare) put DD into nursery and return to work.

During the extended maternity leave I could continue to study so that my starting pay would be higher.

Does this sound like a sensible/reasonable plan? I'm sure I'm looking through rose tinted glasses. What's the catch? What could go wrong. Any other suggestions.

Please be gentle, I'm trying to come up with a solution that works and am open to anything at this point.

Sounds fine to me, but you won't be paying yourself a wage - you will simply be living off your capital.

Your savings will impact your UC eligibility so check that side of things.

Can't you use your savings to pay for childcare?

What an absolute tool you are.

Where is the other parent in all this? Can they contribute towards childcare?

So to put it another way, once maternity leave is finished, you plan to take a year to study and re-train for a new role since you have now left the military. You intend to self fund your study and training by living off savings for a year, to enable you to support your family better. This seems like a responsible thing to do for your family. Following study/training you will be able to start a job in a new industry on a higher pay, which will help support your family and decrease your need for ongoing benefits. I wouldn't have any issues with that. Are there any grants for retraining after military service?

Depending what your settlement payment is it may be disregarded for universal credit for 12 months (e.g. personal injury claim)

I think the biggest risk for you is the timing of the settlement payment. How will it impact your plans if the ~20k is much later or less than you were expecting. What's the worst case scenario?

I am very sad for you that you might have to dwindle away a lump sum payment like that instead of being able to put it towards an asset. Can you access any specialist advice eg through Forces charity to help you navigate and explore your options?

I don't suppose the father of the child is contributing? So sorry you are in this position.

Except she's not. She's planning to live off her savings and THEN return to work and claim in work benefits, which many single mums do.

What was your original plan to pay for a baby before you got pregnant?
Is the baby's dad not going to contribute? Why is it all on you to support the baby?

I don’t see the issue here. I would do the sums (if you haven’t already) on using the savings for childcare to see if you’d be better off doing it that way. Otherwise, seems sensible. You’ll be earning more afterwards and therefore paying more in to the system at that point. The cost of childcare is a piss take for a single parent family!

I have worked and payed taxes my whole life. I gave an oath saying that I would die for my country. I was sexually abused and became pregnant (so don't come here saying you chose to have children). I am planning to claim a UC top up (whilst working full time). When not working I will be using my capital and this not claiming any benefits. Unfortunately the costs of nursery are to high for me to pay as a single person - a symptom of our broken state.

I did think about that but it would be very tight. I probably will end up using some of them, but then I would have no safety net. This way would also give me an additional year with my daughter which is priceless

He hasn't acknowledged the birth of my DD, he has just lost his job (sexual abuse), pays no maintenance, is a danger to both my DD and me. So it's all on me now 🙂

I received a small grant which has paid for my a significant portion of my degree which I have been studying whilst on mat leave. I have 1.5 years to go.

Put your savings in your baby's name, premium bonds or something and then you can legitimately claim UC. You'd get £726 a month for a single parent to 1 child. Literally just the bare minimum to survive. You have paid in so you are entitled!

I think that sounds fair then, you are trying to better yourself and sounds like you've had a tough time with DDs dad

If you can make a claim they will pay up to 85% back for your childcare.

@Mmr224 otherwise yes. That is my plan.

That's what I was hoping. If I use my savings to live on rather than nursery fees. When I go back to work I will be eligible for the 85% reduction. I think that is the only way I will be able to do it.

I mean, if the UC system isn’t for people like you in your position then I have no idea who it should be for!

Oh give over! Supporting people who need it is the whole point of the benefits system. The OPp also made clear she has worked previously so has contributed to the system.

What would you have her do instead? Troll.

After the first £4k of your savings have been spent (as long as you aren't intentionally using them to reduce your savings below the threshold), then you'll be eligible for UC. If you get a job, you'll be able to claim up to 85% of childcare back through UC. So you might have more flexibility than you think.

I'm sorry you're having to make these sorts of choices.

I am so sorry, that sounds very tough.
I think that what you are proposing is that you live off savings until they are depleted enough to claim benefits, don't see what the problem is with that
Just make sure that you disclose all financial info when applying and you should be ok
Best of luck x

I don;t understand why you don't start working. Yes, you'll struggle to afford childcare and other costs, so use "SOME" of your savings to subsidise your wages for a couple of years or so. That way you won't exhaust your savings to finance you not working!

To be honest, it sounds like you just want to fiddle the benefits system.