Benefit Entitlement

[natalie_1982]

Hi, my first baby is due in April and my husband and I are living in our first home. Our mortgage and utility bill committments total �1800 p/m, childcare is going to cost around �600 p/m and we only take home jointly (after tax) �2200. I am getting in a right pickle trying to work things out (I need to book a childcare placement soon) and Tax Credits have told me we are only entitled to �20 p/w in child tax credit, which isn't even scratching the surface. Has anyone been in a similar situaion? I have never had to claim benefits before, I have no idea what I am entitled to and there doesn't seem to be anywhere definitive that can tell me! Thanks all X

[redcrx]

�20 pw sounds about right but i think that once you start paying for childcare (as long as with registered childminder) this will then increase.

You will also get child benefit at around �17 per week.

Thats pretty much all youll get after your maternity pay stops.

Have a word with your mortgage lender and see if you can go to an interest only payment or take a payment break at all to ease the burden, then start looking at ways to cut back. Baby doesnt need much, somewhere warm to live and sleep, food, clothing and love. It doesnt need to cost much altough i think many of us are guilty of buying more than we need.

[natalie_1982]

Thanks Red, I am able to take a payment break once in every 9 consecutive payments. My work are also fairly flexible regarding my hours but I think I will have to go part time where I am now, and then get another part time job during the evening / weekends.

Do you have any idea how much the tax credit is likely to increase once I start using child care? I can't imagine it will make a huge difference either way.

My work run a childcare voucher scheme which I am also looking into but they can affect how much tax credit I am entitled to so want to try and get it all clear in my own head first!

[redcrx]

sorry natalie, i dont use registered childcare so havnt a clue how much it pays towards but i have seen figures of up to 80% about, but this probably depands on household income.

How about asking your local creche if they know?

Have you joined the ivillage boards? There is bound to be someone on there who is in similar position who may help wih the figures. http://messageboards.ivillage.co.uk/n/mb/lists f.asp?webtag=iv-ukpbapr2008&nav=start&prettyur l=%2Fiv%2Dukpbapr2008

[natalie_1982]

Thanks I will try the ivillage boards later. Apparently our joint income is too high to receive any help toward childcare, but it is only just above it (by about �1000 or something) so if I drop literally a few hours per week it may be enough that benefits would be topped up and I would be better of financially for earning less. It's all a headache!

[themas]

I did a very rough estimate on the figures you quoted and tax credit came out as about �44 p wk - but the actual amount does depend on the exact gross income of you & your husband for the 06-07 tax year, & the anticipated income for this tax year. Also, as the baby is not due till April things can become a bit complex with the end of the tax year.

Don't just assume that you will be better off reducing hours & adding to the tax credit. It doesn't normally work out that way because of the way the tax credits are tapered off. You really need some detailed calculations based on your (& your husband's) income under various alternative scenarios. Your local CAB should be able to help with this.