New baby and funky finances

[koalabearboombox]

I'm about to finish a contract which ends ~5 weeks before my due date for baby #2 (first child is 4, at preschool). My employer will be paying me my SMP in a lump sum at the end of March.

My DH and I have saved hard to financially enable me to take 9-12 months off after baby arrives so we're in an OK position.

However at the same time my DH has also finished a contract (3 weeks ago) so in a few days we'll both be technically unemployed. He's currently interviewing for two different perm roles which, if he gets offered, will likely be ~£75k salary.

I'm considering whether to apply for child benefit. We haven't done this before for child #1 as one of us has always been near or over the £80k, but considering we don't know when DH will be employed again, I'm wondering whether to do this and then just update HMRC once circumstances change.

Should we apply, would it be worth it? Also, am I considered employed or unemployed? I'm not technically going to be "in receipt" of SMP after the end of March as it will be paid in a lump sum, but equally I will receive the full entitlement, so perhaps I am?

I would do, so that you get the credits for your state pension when you’re not earning. As you say, you can stop the payments if he earns more than allowed, but still get the credits

With the changes in threshold you’re likely to keep some of it anyway at 75k, especially as pension & other things get taken into account first so it’s not actually the headline salary that decides how much you keep. As long as you’re ok doing a tax return, you might as well get it, earn a bit of interest on it & then pay back what you need to - most wouldn’t be due back until Jan 2027 anyway.