Maternity pay, tax credits etc - please help me understand it all.

[pinkdonkey]

Hi, I am currently pregnant with DC1 and wondering how tax credits work whilst on Mat leave. Currently I work full time and am the main earner on arround £2000 a month after tax, pension etc. DH has a 20hr contract on minimum wage, but most weeks is able to make this up to full time hours taking on extra shifts.

My mat leave pay will start at full pay, then go to half pay, then SMP, and then nothing if we can afford for me to take my full allowance (which I would love to do if possible). Is tax credits etc worked out on average income over the tax year or on a weekly/monthly income throughout the year?

Also DH has a health condition and I am his registered carer, currently I earn over the threshold for carers allowance so the same would apply to if I can claim that whilst on lower pay. I will obviously be having my carers assessment updated to reflect changing circumstances.

Any assistance is much appreciated to help us plan our budget, many thanks.

You can only earn £120 a week and claim carers allowance. I'm not sure if it would be an overlapping benefit with SMP. The threshold for one child for tax credits is around 26k without any childcare costs so you would need to estimate earnings for the tax year to see if you would qualify. You can discount £100 per week off smp of your estimate as that is not counted up to a maximum of 39 weeks.
If the area that you live in is full service for Universal credit then you would no longer be able to make a new claim for tax credits and would need to claim UC instead. Claiming Uc might actually benefit you because you can claim a carers element even if you earn too much to claim Carers allowance as long as you still care for your partner for 35+ hours a week and he is in receipt of DLA or PIP.

If you were to be able to claim carers allowance during maternity leave you would also need to declare that in your tax credit estimate. Underestimating amounts will lead to an overpayment.

Thank you. I thought it would go on earnings for the tax year, but my carer support worker was convinced as soon as my income per month dropped I would be able to claim. Might work out well that this buba is due the beginning of April. Will have to sit down and work it all out, sounds complicated!

DHs condition fluctuates between being unable to do anything (even eat) without my support and being pretty well and largely independent. He won't look into PIP because he doesn't consider himself disabled as it is a mental health problem rather than a physical disability.

I think our area is going onto UC this year, if it hasn't already as the food bank are campaigning for extra donations to cover it. I've never claimed anything before, so am clueless. Think I should book in with CAB.

I am in a similar situation to you. I am currently on maternity leave and wouldn't have qualified for tax credits based on my 2017/18 income whilst working full-time. But HMRC are quite sneaky and what they do is to have you make a claim based on last year's income which (I am assuming) will mean that you don't initially qualify. Then you must ask for this decision to be revised on your 2018/19 expected income if it is going to be more than £2500 less. Which, again I assume, it will be. They will then use your estimated current year income plus £2500 to assess your entitlement.

Only in my case this £2500 they 'add on' meant I didn't qualify anymore. Luckily my area has now gone onto universal credit so they will use my actual income and hopefully will qualify under those rules. It's a bloody minefield.

Hope this helps!

Thank you, that's useful to know, they don't make it easy do they.

Well if I've worked it out right we will be over the threshold for tax credits anyway, looks like it will be a short Mat leave for me not sure how I will manage 6 months let alone 12!

I did under 4 weeks and it was fine actually - you get back into the swing of full time work sooner and less of a wrench for the baby ( I could express milk at work).

Thanks, I've always wanted to be a SAHM and it's been hard enough getting my head round that not being a remote possibility. Need to sit down with DH and juggle figures, work out where we can tighten the belt, etc!