Why won’t I get UC on maternity leave?

[MiaRosexo]

Hey ladies,

Just wondering if anyone could help me with understanding universal credit whilst on maternity leave please and how people qualify? I know that sounds silly but I don’t know if I’m missing something.

I am the highest earner in my household and we will be trying for a baby soon - we are already putting money into a pot as we want to be financially prepared as possible. My partner earns £31k a year and I will only receive SMP. It doesn’t even cover my half of the bills, we own our own house too.

I’ve done the online calculators and we will be entitled to nothing - I’m hoping we will be fine if we can save enough so this is more a question of curiosity really, how little do partners have to earn to be able to claim UC? I’m sure I’ve seen on here and other forums that some partners earn really good wages yet they’ve still qualified for SMP? To me my partner’s wage is quite average, am I missing something here? I think I wrongly presumed we would also be entitled!

thank you :)

When they pay people's rent the state is paying the landlords mortgage. Or even worse the landlord may have multiple houses without a mortgage and you're giving them yet another £1000+ a month for them to use on luxuries.

Even if there was something whereby the bank had to let you go interest only and the UC literally covered that interest. No increase in equity, but means you aren't worse off.

Income protection doesn't cover maternity usually, and not all pregnancies are planned.

Well, without enough social housing to house everyone who can’t buy their own home, private rentals are the only option 🤷‍♀️ That is an entirely different conversation though.

If you can’t afford to pay your mortgage, you can ask your lender to move to interest only or take a payment holiday. You can sell your home and rent a property and receive UC towards the rent. You can get support to pay your mortgage interest from the DWP but it is a loan that has to be repaid when the property is sold.

https://www.gov.uk/support-for-mortgage-interest

That's likely because they already have DC. UC is generous if people have DC, any disabilities, or caring responsibilities but very mean to a single person or a couple with no DC.

It’s not obligatory to take 9 months to a year off. You should get a certain amount of weeks at full/90% pay from your employer, as PP said find out if your partner’s employer offers any enhanced paternity, add in your savings and work out what you can afford to take off.

You can't sell your house, rent another and claim UC. You can only keep that type of cash and claim UC if you buy another house. Above £16k would make you ineligible. Plus who sells their house in order to rent?? It isn't that easy to "just sell your house". Ours needs lots of work.

That’s such a stupid suggestion. Selling your house costs a fortune in estate agents and solicitors fees, plus stamp duty and moving costs! 🙄

Really interesting - just done the calculation as if we rented rather than owned, and we would be entitled to £123 a week apparently (including child benefit). I had no idea it worked like that!

Did you read the quote in my post, @IVFmumoftwo and @TaylorSwish? The thread has prompted a second discussion about whether it is fair that UC doesn’t pay the housing element to pay people’s mortgages, only rent.

The advice wasn’t for OP. It was a response to a poster who thinks it’s not fair and that there should be a scheme where UC pays the interest. I was pointing out that there is. Obviously it would be mad for OP to do that!

UC pays towards rent because without it tenants would be facing homelessness in a few months. If you want to buy a house, you need to budget for income protection if you lose your job or become unwell and save/plan ahead so you can afford to have a family (like OP sensibly is doing). Those suggestions are the last resort options for those who are in financial dire straits. If you own your own home, you won’t end up homeless if UC doesn’t pay your mortgage even though you might end up losing your home. You would have the same safety net as tenants, UC will pay towards rent if you can’t afford to pay your mortgage and your home is repossessed.

OP don’t forget to budget for childcare when/if you return to work.

UC don't pay your mortgage interest, they will offer a loan which you repay with interest when you sell. This can therefore be a substantial amount to repay. If the same logic applies why do renters get all of their rent paid, often way higher then the interest part of a mortgage? Maybe we should just lend them the rent too! Income protection premiums for long-term payout are very high. Why shouldn't renters have to forward plan too i.e. don't have kids until you can afford a house?

To me my partner’s wage is quite average, am I missing something here? I think I wrongly presumed we would also be entitled!

Universal credit is for people struggling on low wages, not to top up someone on an average wage because their higher earner has gone off on maternity leave.

How many weeks are you planning to take off? I had my kids ages ago and went back when my first was 17 weeks as money was tight and that's when the maternity pay ran out.

Sigh… 🙄 Yes, I explained that the support for mortgage interest scheme is a loan in a previous post.

I’m sure most renters do have to plan their finances to be able to afford having a family. Do you want to ban people on low incomes who rely on UC from having families, @Summedupnicely?

The housing element of UC is there to pay for housing not to buy people a house. Can you really not understand the difference between someone who has had their mortgage interest paid by the scheme having to pay back the loan when they sell their house for hundreds of thousands of pounds and renters having to pay back rent covered by UC? One has a valuable asset to sell that has been partly paid for by the state, the other doesn’t…

What should we do about people who own a home outright who need to rely on UC if you think UC should pay the same housing element to people with mortgages as those who rent? Should we give them the housing element too to even things up with those who own a house with mortgage? Should people who have car loans and credit card debt get those payments paid by UC because they have higher outgoings than people who don’t?

Anyway, good luck with saving for your future family OP! You seem to have more financial sense than some posters.

Don't try to figure it out from other people's experience - UC is too variable depending on household composition. Use a benefits calculator to check properly

What are earth are you bringing car loans and credit cards into your narrative for? We're talking about housing costs. Paying the interest part only on a mortgage is a bit like paying rent, it isn't contributing to paying the amount borrowed off. You do also realise that house prices can go up and down don't you? So someone who buys, pays all the fees associated with buying and owning a home and then has to sell on a slump could come out with negative equity, not have hundreds of thousands of pounds profit as you seem think. I can only assume you've never been a homeowner otherwise you'd understand this.

I have a mortgage and live on my own with my 3 year old and originally went to back work part time bringing home £1600 and got a measly £74 a month UC. Going back to work was not optional for me because I think the Max I could get would barely cover my mortgage.
Anyway I work slightly less hours now and get about £460 UC but it's still so shit having a mortgage 😭

It's a one bedroom flat too. Feel pretty stuck in my situation 🫠

Oh no this sounds really tricky I'm so sorry. I hope your situation eases some how :( can't be easy x

The support with mortgage loan is repayable when you sell or transfer your home to another person (eg interitance), @Summedupnicely. No one has to sell their home to pay it.

Mortgage interest is not like paying rent 🙄 Car loans and credit card debts are a far better analogy. If you buy something on credit, with a loan or a mortgage, you pay interest. You have to take that into account when you chose to buy the house/car/giant TV. The amount you pay is more than cash purchase price but you own the item once you have paid the money back. You own nothing after paying rent.

Do you really think UC should be subsiding the cost (because interest is part of the cost of buying a house if you aren’t a cash buyer) for people on lower incomes? The housing element is there to keep a roof over people’s heads not buy a house.

It's because you pay a mortgage rather than rent. UC covers rent through the housing element, but doesn't cover mortgage (SMI won't be relevant in your case).

Bear in mind that SMP is paid for up to 39 weeks which is roughly 9 months. If you or your partner want to take a full year of maternity/parental leave, the last 3 months will be unpaid. During those 3 months of no SMP, you would be entitled to a small amount of UC (about £95/month).

As you earn more than your partner, it would make sense to share the parental leave, ie you take 6 months of maternity leave and then he takes 3-6 months of parental leave (depending how long you can afford).

Has anyone taken shared parental leave and resented their partner for it? I don't know if that's mean of me and of course I will consider it if we absolutely have to, for financial reasons, but I can't help but feel like I'd be jealous of those who get the full maternity leave off because their partners earn enough for them to do so

Lord no, SPL was the best thing we did. My H realised how hard spending all day with the kids was.

Did you use the calculator as if your baby was already here as having a kid on the claim makes a difference with the work allowance. It is likely though that because you get no housing element when you have a mortgage you maybe just don't qualify.

The taxpayer is still paying off part of the landlord's mortgage though. Personally as a taxpayer I'd rather support people to live in homes they own rather than indirectly support BTL landlords to pay off their investments.

Perhaps try to let go of the idea that a "full maternity leave" is a year long. This is entirely cultural. The UK is somewhat unique in having both a cultural expectation that maternity leave should be a year long, and very poor maternity pay. Usually countries where long maternity leaves are normal have more government support for maternity and paternity leave, and countries where it is poorly paid don't have the expectation of a year off. This results in British women feeling they have to save up for a year off they can't actually afford because if you go back earlier it means you don't love your baby.

I'd be jealous of those who get the full maternity leave off because their partners earn enough for them to do so

You can only take as much leave as you can afford though. Don't take the 'full' year if your finances won't allow it. Take what you can afford and then go back. Have 4 months/6 months/8 months-whatever fits in with your bank balance.

Being jealous of friends because their husbands earn more is a slippery slope which never ends!

Personally, as a taxpayer, I don’t want my taxes to pay anyone’s mortgage, especially not landlords. I would rather my taxes went on social housing.

There already is support for people with mortgages on UC, it’s just that it is a loan that has to be paid back when the property is sold at some indeterminate time in the future or transferred to someone else eg by inheritance.

Why should homeowners be treated preferentially over those who can never afford to buy a home? You really think one group should get part of the cost of buying their own home paid if their income reduces but poorer people should only get their rent paid?

@KnickerFolder You're making a big assumption there that poor people rent and well-off people have a mortgage. People rent for lots of reasons, one being they get it paid for by UC. Where's the incentive to buy particularly if they are in social housing which provides stability, unlike private sector.