Maternity Pay & Child Benefit & Tax Credits

One of my self employed clients is about to have her first child and I've been looking into the following for her, so though I would share.

Maternity Pay for the Self Employed

When you are employed you may be entitled to Statutory Maternity Pay from your employer. When you are self employed you may be entitled to Maternity Allowance.

If you’re registered self employed and paying class 2 NI contributions, or have a small earning certificate, you might get Maternity Allowance. You may be eligible if you’ve been employed and/or self employed for at least 26 in the 66 weeks up to and including the week before your baby is due.

You must also earn an average minimum of £30 per week in each of the 26 weeks.

Maternity Allowance will be paid up to a maximum of 39 weeks but what you receive will depend on your earnings. If you average earnings is less than 90% of £128.73 you will receive the lower figure, if you earnings are over £128.73 you will receive £128.73 per week.

You can claim maternity allowance when you reach the 14^th week before your baby is due (week 27) by completing the MA1 pack. You can request it from your Jobcentre our download it here: http://www.dwp.gov.uk/docs/ma1.pdf

There are been a few changed to Child Tax Credits and Child Benefit for this tax year.

Child Tax Credits
From 6th April 2012 the limits have lowered. The HMRC have given out the following rough guide. If you earn
- over £26,000 and you have one child
- or over £32,200and you have two children
you might not get child tax credit. However this does depend on your circumstances as you may still be entitled if you pay for registered or approved childcare or your child has a disability.

For the most accurate calculation contact the HMRC, or you can get an estimate by using the calculator on the HMRC website here.

Child Benefit
Child benefit is paid to anyone responsible for a child under 16 or under 20 and still in certain full time education. You get paid £20.30 per week for the first child and £13.40 per week for any other children.

However, child benefit is being gradually removed for any household earning over £50,000 per year. This will be reduced by implementing a tax charge on the tax payer for earning between £50,000 and £60,000. Over £60,000 you will loose child benefit completely.

This comes into effect from the 2012-12 tax year and will effect child benefit paid in the period 7th Jan 2013 to the end of the tax year.