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Can I claim Unemployment Benefits if I decide to become a SAHM? sorry long rant

31 replies

MrsBigDrumsADrumming · 28/12/2004 17:49

As dh is on leave I actually have time to think and worry about things...

Ok. so here's the deal... I'm currently on maternity leave and would love to go back to work in April, BUT if I do, then childcare for both kids plus travel cost would cost me more than I'd clear a month and that's with a very reasonably priced childminder and before any other possible expenditure.

I like my job, but not enough to be willing to pay for the priviledge iykwim... did my calculations and and boss would have to give me a pay rise of at least £5000 to make it viable ... yeah right ! He's a regular scrouge (how's that spelled?)

I've been trying to work out options by trawlling through the inland revenue and job center sites but tbh I found it all very confusing, and I'm usually very good at research...

I've read about the new childcare voucher thingy so the money comes out before tax and therefore the tax group would be more favourable but don't think boss will go for it considering that we are only 9 staff (incl. cleaner and guard) and he hates additional paperwork.

We don't qualify for the childcare part of the childcare credit (done the calculator thingy on the IR site) as it's based on last year's income... how daft is that? Of course I was earning last year... didnt have the baby then!

Working Family Tax credit... forget it

So basically trying to work out whether I would be able to claim unemployment benefit if I decide not to go back to work.

Wouldn't it be nice if there were a SAHM benefit, it's not as if we sit on our lovely behinds all day not doing anything!

Sorry rant over

Happy New Year!

OP posts:
Gobbledigoose · 28/12/2004 17:51

Don't think so. I think you can only claim unemployment benefit if you are unemployed through no fault of your own iyswim. If you choose to finish work I'm afraid you get nowt!

MrsBigDrumsADrumming · 28/12/2004 17:53

Thought as much, but thought maybe some wise MNer knows loop holes and also it helps to unload. Don't want to bother DH with it as he's stressed enough... a week with me and the kids probably already makes him wish he'd be a work...

OP posts:
hatterselfamerrymerrychristmas · 28/12/2004 17:57

As far as I know if you claim unemlpoyment benefit (job seekers' allowance, I believe it is now called) you have to be actively seeking work. They are quite tough on this and you have to show them job applications etc, if you claim for more than a certain period of time then you have to attend a job club type thing where they stand over you while you go through the paper/trawl the internet and make job applications.

iota · 28/12/2004 17:57

I looked at claiming benefit when I was made redundant, but these days you really have to make an effort to find work to receive benefit - they will also test your availability - ie you have just given up work to be at home - what will you do with your children when at work etc. You also have to show evidence of attempting to find work - application letters etc

My conclusion was that it wasn't worth the hassle and lying to claim 60 pounds a week

Cinderellascarrieg · 28/12/2004 18:01

You MIGHT be entitled to NI based Income Support for 6 months I think? A friend of mine is a SAHD & had assumed he'd get nowt as his dp works full-time & earns enough to keep them, but he subsequently discovered that having 'paid his stamp' whilst in f/t employment he could claim for 6 months irregardless of his dp's salary.

The stumbling block is probably the fact that you'd be 'intentionally' jobless. Don't suppose your scrooge of a boss could be persuaded to make you redundant could he?

DelGirlsRingAreYouListening · 28/12/2004 18:03

i've been looking at the IR site to work out working tax and family credit etc and i've put in what my earnings are likely to be when I go back cos I figured that would be the relevant one and the credit makes up about 3/4 of childcare costs for me. Is that not how it works then? Seems fairer to base it on what you will be earning not what you were?

MrsBigDrumsADrumming · 28/12/2004 18:19

Cinderella... thanks for the NI based IS tip. Will have to look into that. As for scrooge making me redundant... doesn't that mean he can't fill the position? Unless of course we could dress it up that I want to come back part time and the position requires full time... gotta think about that. He might be willing to go for it if it doensn't cost him.

DelGirlsRAYL... that's what I figured too, but when filling in the form it requests earnings from April 2003-March 2004... hence my frustration... but maybe I'll manage to get something as it'll be the new tax year when I'm planning to go back and won't have earned much for the last 7 months due to the oh so fantastic maternity pay of £102 a week...

oh it's all so frustrating. Where's that glass of wine to relax ... going to get it now

OP posts:
iota · 28/12/2004 18:24

To clarify,I was referring to the NI benefit of 60 Pounds a week in my earlier post - it is not means tested, BUT you do have to prove that you are available for work and actively seeking work

iota · 28/12/2004 18:26

and they will know that you have recently claimed maternity benfit as they get your NI records in order to calculate the NI entitlement

Cinderellascarrieg · 28/12/2004 18:30

Well, again, my friend's previous job was something fairly rarefied in games design & he managed to fill the forms in with so many restrictions on what he was prepared to do, what hours he was willing to work & what wage he'd accept that they left him in peace for 6 months!

After that my understanding is that they DO get on your case re: availability for work, & expect you to be making a serious effort. So it's never going to be a long-term solution...

JudgeFlounce · 28/12/2004 18:34

Message deleted

iota · 28/12/2004 18:36

This is what you have to do to get the benefit - it put me off:
This is the link

If you decide to claim JSA, we will give you an appointment for a New Jobseeker Interview and a claim form to fill in and bring to the interview.

If you need help filling in this form, we can arrange this.

At the interview, an adviser will:

make sure you understand the rules for JSA
discuss the kinds of work you are looking for and the best ways of finding a job
give you information about jobs, training and other opportunities
check that you have filled in your form fully and given us all the information we need.
To get JSA you must have a Jobseeker's Agreement. You and the adviser will make this agreement at this interview, and you will both sign it.

If you need a private room for your interview or want us to provide someone to help you at the interview, for example an interpreter, please let us know in advance.

If you are aged 18 or 19, the Connexions Service can provide you with support in making a claim for JSA, during your interview, or at any other time. For your nearest Connexions Service office, look on the website or under Connexions in the business numbers section of the phone book.

You must usually come to the Jobcentre every two weeks to confirm that you are still entitled to JSA. We will discuss how your job search is going and how we may be able to help you.

As well as seeing us every two weeks, you must also come to regular, more detailed interviews to look at your situation.

Jobseeker's Agreement
Your Jobseeker's Agreement will include details of:

your availability for work
the kind of work your are looking for
what you will do to look for work and improve your chances of finding work
how Jobcentre Plus aims to help you.
If you are aged 16 or 17, your Jobseeker's Agreement will cover training issues as well as work, as you will be required to actively seek both. It will also state the actions you will take to seek work and training which you will have agreed with the Connexions Service or Careers Service.

If you and the adviser cannot agree on the content of the Jobseeker's agreement, a Decision Maker will decide if the proposed contents are reasonable.

If you do not agree with their decision, you can ask for it to be looked at again by another Decision Maker. If you still do not agree, you can appeal.

You will not usually be able to get JSA until you have a Jobseeker's Agreement. In some situations you may be able to get a reduced allowance under the hardship provision.

JudgeFlounce · 28/12/2004 18:48

Message deleted

iota · 28/12/2004 18:51

JF - I wouldn't have a problem with doing that stuff if I really wanted a job, but I couldn't face doing it and lying at interviews etc if I wasn't really hoping to get a job, but wanted to stay at home with the kids

JudgeFlounce · 28/12/2004 18:55

Message deleted

iota · 28/12/2004 18:59

JF - the stakes aren't high enough - £60 per week isn't enough for me to put myself through that .....£600 a week might tempt me

MrsBigDrumsADrumming · 28/12/2004 20:31

thanks for all the input I just find there are too many trees to see the wood! iykwim

iota : thanks for the criteria, well that's definitely not worth the hazzle for £60 a week!

JF - now there's a thought... I did get pnd after returning to work after dd... so maybe I'll get it again now I've had ds... actually very tearful atm... cried my eyes out watching Barbie's Princess & Pauper this arvo with dd... I know... I'm sad! DH was p'ing himself laughing and called me a soppy moo... I don't mind... have a huge box of tissues next to the settee

OP posts:
mishiclaus · 28/12/2004 20:56

i am on incapacity because of wasnt faked but it was fairly easy to get which surprised me.i didnt have to go for interview or anything I just filled in forms and got a sick note from gp and thats it..i now just send in note via my dh when the last one runs out..I did return to work for about 3 mths but the depression was to much so now i am a sahm. It works out to around £65 a week but apparently increases after 6 mths but also in terms of child tax credit i would phone them instead of doing online as on phone they work out this years earnings. Hope you have some luck with it
take care

MrsBigDrumsADrumming · 28/12/2004 22:34

mishi - thanks for that input.

Wouldn't have to fake it I think as I am 'on the brink' but sort of coping as I've got a wonderful supportive dh (even though he does occasionally up the wall), so have no idea what will happen once I should go back to work... at least now the kids are starting to sort of sleep through...

OP posts:
stabilo · 28/12/2004 22:52

right i am in this situation a couple of years ago - you need to phone the Working family tax credit help line - you then tell them your ands dh's wages for last year but tell them you no longer work that way they only take your dh's wages into consideration - we did this and are now entitled

LunarSeasonsGreetings · 29/12/2004 08:46

They calculate the tax credits on last year's figures, because the figures are verifiable, and for most people it won't be dramatically different this year. And then they should make adjustments later if this year's figures are different. If your circumstances have changed dramatically - either income or childcare costs - as in your case, then they should work out new figures based on the current status.

As long as you work 16 hours a week or more then you may well be able to get some help with childcare (depending upon your income of course).

If you want to go back, but not necessarily full-time, then it is probably worth trying to get your hours reduced to 16 if you can, as it's often easier to get a full time job reduced to part time - and retain your exisiting pay rates -than it is to find a suitable part time job which pays the same.

Although surprisingly it may not be worth you working much more than that unless you are fairly well paid, relative to your additional childcare costs.

The childcare tax credit is 70% of childcare costs (up to a maximum of £135 per week) - but they reduce this at a rate of 37p in the £1 for every extra pound you earn. Bearing in mind that on that £1 you'll also probably be paying tax at 22% and National Insurance at 11%, that's effectively a whopping 70% tax rate, and you'll still have to pay 30% of your additional childcare costs out of what's left.

Let's assume that we are starting from a position of you working 16 hours a week (the minimum to qualify for the childcare element of the tax credit) which will also allow you to benefit from your personal tax allowance, but are not at this level at the maximum £135 per week childcare spend....

Say your childcare cost is £4 an hour, and you are paid £5 an hour. Working one additonal hour will increase your income by £5 and your childcare costs by £4.

However the childcare element of child tax credit would increase by £4 x 70% = £2.80

But because your income had increased it would be taken away again at a rate of 37% of £5 - i.e. £1.85

You'd also be paying additional tax @ 22% and NI @ 11% - i.e. a total of £1.65.

+£5 (pay)
+£2.80 (CTC)
-£4 (childcare)
-£1.85 (CTC)
-£1.65 (tax)

Overall result: better off by 30p !

Try the calculator based on your projected position with childcare, and ignore the "use last years figures" bit to get a better idea for your circumstances.

Try the scenario of going back on your current hours/salaray, and paying childcare for that time, and compare it with the incomes/cost if you could go back for 16 hours (with salary pro-rata). You might find that there is little difference. On the example above, going from 16 hours a week to a full time 37.5 would leave you just £6.45 a week better off (some of which would probably be swallowed by extra transport costs etc in order to work the extra time).

LunarSeasonsGreetings · 29/12/2004 09:35

Oops sorry - misread that you have to pay childcare for 2 - the figures I gave were based on one. For two the childcare limits are 70% of £200.

Breakeven would be at the point where your hourly rate of pay equals your childcare cost.

e.g. childcare cost is £8 an hour, and you are also paid £8 an hour. Working one additonal hour will increase your income by £8 and your childcare costs by £8.

However the childcare element of child tax credit would increase by £8 x 70% = £5.60

But because your income had increased it would be taken away again at a rate of 37% of £8 - i.e. £2.96

You'd also be paying additional tax @ 22% and NI @ 11% - i.e. a total of £2.64.

+£8 (pay)
+£5.60 (CTC)
-£8 (childcare)
-£2.96 (CTC)
-£2.64 (tax/NI)

Overall result: break even (before extra transport, etc)


However working zero hours (if we assume £8 an hour) would reduce your income (relative to 16 hours) by £128 a week.

It would also reduce your childcare by the same amount - £128

But you would lose the childcare element of child tax credit of £89.60.

However the amount of tax you would pay on £128 per week is less. £91 a week is free of tax and National Insurance, and then the rest of it you would only pay tax on @ 10% and NI at 11%.

So for £128 a week you'd be paying
£37 x 21% = £7.77 (tax+NI)

Depending upon your partners income you could actually get additional working tax credit because you family income has reduced, of up to £47.36 a week (37% of £128)

-£128 (pay)
-£89.60 (CTC)
+£128 (childcare saving)
+£7.77 (tax/NI saving)
+£47.36 (possible increase in WTC)

Overall result: £34.47 per week worse off.

This is last yeasrs info but it gives a good idea of how it works at different levels for the amount of credits, although it doesn't take into account of tax.

Complicated eh? If you want help for your individual figures I'd be happy to help if you want to CAT me.

mum2twins · 29/12/2004 10:32

I hope this story helps you but I do think this is prime example of the 'system gone mad'. Someone I know, with no children was getting married. She worked and left her job voluntarily to go and live with her new dh. She sold her house and therefore has approx. £100k in the bank. He earns £50k+. She has no intention of working again, however she learnt she could claim 'job seekers' allowance. I said they will no way give it to you! Famous last words, she got it easily, is not looking for a job and as far as I know just tells them she can't find anything she likes the look of and doesn't even have to prove she is looking....but at least the money is going on things worthwhile..she is builing up her collection of prada handbags!

MrsBigDrumsADrumming · 29/12/2004 14:44

LSG - thanks for doing the maths I'm rubbish at that.

Mum2Twins... well some people have all the luck , usually not me though as I'm usually the poor sod who gets asked for all the papers and proofs... when applying for SMP after having had dd (and not having been long enough with company I worked for) they first of declined even though I supplied EVERYTHING! I then wrote back in with exactly the same stuff and it got accepted... go figure

OP posts:
iota · 29/12/2004 15:04

mum2twins - in your childless friend's situation, she would be well advised to sign on as she will get NI credits. The income based JSA only lasts 26 weeks, at just under £60 per week and then she will get nothing but NI credits, which protect future benefits and pension entitlement.

Women with children don't need to claim NI credits as they get Home Responsibilities Protection whilst they are in receipt of Child Benefit.

As you can see I did a lot of research on this when I was made redundant

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