50% of Women May Choose Career over Children

This is an increasingly relevant debate because women continue to make in-roads into a once very masculine world of work. They are forging successful and extremely relevant careers across a broad spectrum of professions including medicine, management, accounting, PR, sales, and as entrepreneurs of course! Those are just a few industries where women are an integral part of the working landscape. But what happens to their careers when they choose to have children?

It is a quandary that gives many women sleepless nights – but why?

In October 2014 Association of Accounting Technicians (AAT) conducted a survey of 2,000 women – half with children and half without – to learn how they felt about motherhood in relation to their career.Their findings were that 67% of women are concerned by the impact that having and raising children can have on their careers. (Source) Half said they would certainly consider remaining childless as a result of this concern.

If this is something that is affecting you then take a look at the support you will receive if you decide to balance career with children. It is not an easy task but it is certainly possible and many women successfully balance parenthood with an illustrious career. There is no right or wrong answer for raising a child but if 50% are worried about losing a secure job then it helps to have all the facts.

Here is what you will need to know about tax credits, vouchers, maternity and paternity leave.

Tax Credits

Many people presume wrongly that tax credits are for the unemployed. They are there to help with childcare for people who need to work. The Childcare Tax Credit is designed to help working parents cover some of the cost, so that they are better off at work rather than working just to cover childcare costs.

The money available can be extensive so it’s crucial to check if you’re eligible. There are potentially hundreds of thousands of families missing out. To hone the point further the average childcare tax credit payout is around £60 per week – that is over £3,000 a year.

The official name for the widely recognised Childcare Tax Credit is in fact Childcare Element of Working Tax Credit. There is one draw back – the entitlement system and eligibility criteria are extremely complex and vary depending on the number of kids you have. The following guide is a good starting point.

To qualify for childcare tax credit you must:

  •  Be a single parent working 16+ hours a week, or
  • Be in a couple both working 16+ hours a week

If these points apply to you then your total household income must be under £41,000 to qualify. If this is you then you should check your entitlement here: https://www.gov.uk/childcare-tax-credits/eligibility

There have been exceptions where those with household income above £41,000 have been eligible.

Childcare Vouchers

Chilcare vouchers are offered via employers and there are a lot of small and larger companies taking part in the scheme. They can save parents with children up to the age of 15 over £1,000 a year on childcare.

These vouchers help you pay for childcare out of your pre-tax and National Insurance income. Generally, employers work it on a salary sacrifice system which looks like the following (basic rate tax example):

You give up £1,000 of salary, worth £700ish in your pocket after tax. You get £1,000 of Childcare vouchers. This means you’re £300 better off per grand (Source)

Your normal salary resumes once you do not need the childcare benefit. Both parents (if basic rate tax payers or higher/top payers who joined the scheme before 5 Apr 2011) are allowed to get a maximum of £243 per month worth of vouchers.

“From 6 Apr 2011 new joiners paying higher or top rate tax had their allowance dropped so that all tax payers have roughly the same maximum tax gain. From April 2013 the limits are £28 a week for higher rate and £25 a week for top rate payers” (Source)

There is a new tax-free childcare scheme set to come in Autumn 2015 which will replace the existing programme. This scheme will be available to everyone who works more than eight hours a week and earns more than £2,420 a yearand pay for childcare. The new scheme will be open to the self-employed too.

There are huge benefits with the new programme – 20% of their yearly childcare costs (up to £10,000 per child) will be paid for by the Government.

BEWARE when you access childcare vouchers this can have an impact on your tax credit eligibility. What this means is:

“The more you pay in childcare, the more tax credit you’re eligible for, but any amount you pay in vouchers doesn’t count towards that. For example, if you pay £100 a week for childcare, but use £60 of vouchers, for tax credit purposes you’re only spending £40 a week on childcare, so it’s this figure you must enter on your Tax Credit claim form.” (Source)

Make sure you notify the tax credit office within a month of claiming childcare vouchers. You can be fined if these changes are not taken into account. Transparency is always the best policy for a smooth process.

To calculate your eligibility for childcare vouchers take a look at HMRC’s page: http://www.hmrc.gov.uk/calcs/ccin.htm.

Maternity & Paternity

To qualify for Statutory Maternity Leave:

  • you’re an employee not a ‘worker’
  • you give your employer the correct notice

How long you’ve been with your employer, how many hours you work, or how much you get paid do not have a bearing on your eligibility provided you earn at least £111 a week.

To qualify for SMP you must:

  • give the correct notice
  • give proof you’re pregnant
  • have worked for your employer continuously for at least 26 weeks up to the ‘qualifying week’ – the 15th week before the expected week of childbirth
  • Work out your qualifying week using the maternity pay calculator.

You can’t get SMP if you go into police custody during your maternity pay period. It will only restart when you’re discharged.

To qualify for Statutory Paternity Pay you must be taking time off to look after the child and be:
  • the father
  • the husband or partner of the mother (or adopter)
  • the child’s adopter

For ordinary paternity pay you must:

  • be an employee
  • have worked for your employer continuously for at least 26 weeks by the end of the 15th week before the expected week of childbirth (known as the ‘qualifying week’)
  • give the correct notice

Additional Paternity pay requires the mother to have qualified for:

  • Statutory Maternity Leave or Pay
  • Maternity Allowance
  • Statutory Adoption Leave or Pay

They must have returned to work and no longer be getting any of the above.

As the father you must:

  • have worked for your employer continuously for at least 26 weeks by the end of the 15th week before the expected week of childbirth (known as the ‘qualifying week’)
  • still be employed by your employer the week (Saturday to Sunday) before your leave or pay starts
  • earn on average at least £111 a week (before tax)
  • confirm the start and end dates of your partner’s leave
  • confirm your partner has at least 2 weeks left of their maternity or adoption pay (Additional Statutory Paternity Pay only)
  • give the correct notice

You’ll only be able to take Additional Paternity Leave before 4 April 2015. You may be eligible for Shared Parental Leave and Pay if your baby is due on or after 5 April 2015. (Source)

Use GOV.UK to calculate your maternity and paternity here: https://www.gov.uk/maternity-paternity-calculator

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