Article: Financial Entitlements

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Money pictureFollowing the birth of a child, there are several financial payments that you are entitled to receive as a parent or guardian. Some of these are explained in more detail below:

 

Child Benefit
This is a tax-free payment that you can receive for each of your children, which can be claimed by anyone who qualifies, whatever their income or savings. It is usually paid every four weeks, and there are separate rates for each child. The only way to claim is to complete a
Child Benefit form and send to the Child Benefit's Office with your child's passport or birth certificate. Please click here for further information on who qualifies and how much you will be paid.

To make like easier, Family Nest have developed a great child benefits calculator that gives you a total of benefits and credits that you could be entitled to in under a minute. To use the calculator please click here.

  

Child Tax Credits
Child tax credits can be claimed by people who are responsible for one child or more and is paid directly to the person who is primarily responsible for caring for them. To qualify you must be over 16 years of age and usually live in the United Kingdom (although there are circumstances where you can apply if you do not live in the United Kingdom). The amount you get will depend on your annual salary and the number and age of the children. To find out if you qualify then please
click here for more information.

To make like easier, Family Nest have developed a great child benefits calculator that gives you a total of benefits and credits that you could be entitled to in under a minute. To use the calculator please click here.

  

Child Trust Fund Voucher
Children born between 1 September 2002 and 2 January 2011, who live in the United Kingdom, for whom Child Benefit was being received for at least 1 day before 4 January 2011, are entitled to a Child Trust Fund (CTF) account, which is a long-term savings and investment account. The Government will automatically have sent a voucher for up to £250 depending on when your child was born and when they became entitled to an account. Parents, family and friends can add to the account, but the account is in your child's name only, and once they are 18 they are free to use the money how they wish.

Babies born on 3 January 2011 or later, or before 1 September 2002, do not qualify for a CTF account and won't get any CTF payments.

You could get a higher starting payment if a local authority looks after your child. Click here for more information.

When the CTF was originally set up, all children who were seven between 1 September 2009 and 31 July 2010 received an extra payment of £250 on their seventh birthday. Children in low income families also got a further £250 when they turned seven. Click here for more information.

All age seven payments have now stopped and won't be paid for children who turn seven after 31 July 2010. 

Once you receive your voucher you will need to open an account. There are 3 different types of CTF account available to choose from - savings accounts, accounts that invest in shares, and stakeholder accounts. The one you choose depends on how you feel about taking risks to give the money a better chance to grow. You will be able to add to the account as you wish with one-off or regular payments. For more information on choosing an account please click here.

For all information relating to Child Trust Funds, please click here, or visit MyEggNest for a complete one-stop guide to children's savings.

 

Childcare vouchers
Childcare vouchers are aimed at helping parents to cover the costs of childcare when they return to work. The vouchers are a government work-life balance scheme whereby your employer, in conjunction with the childcare provider (for example Computershare Voucher Services
, Edenred, SayCare Pass, Childcare Voucher Solutions), agrees for you to 'sacrifice' part of your wages in exchange for childcare vouchers, which are non-taxable and exempt from National Insurance Contributions. The amount of Income Tax and National Insurance you will save is dependant on your salary.
You can then exchange the childcare vouchers you receive for part or full payment of the childcare services you choose to use.

If you already receive childcare vouchers and are currently on (or planning to go on) maternity leave, also note that changes to the Sex Discrimination (NI) order 1976 and Maternity and Parental Leave Regulations (NI) 1999 now place a requirement upon employers to treat additional maternity leave period in the same way as ordinary maternity leave period with regard to the provision of non cash benefits, which encompass childcare vouchers. This means that for babies due on or after 5th October 2008 employers are obliged to continue providing childcare vouchers if the employee is already receiving childcare vouchers, on the day she starts her maternity leave.  

Not all employers may take part in the childcare vouchers scheme however so you will need to clarify, and all carers who receive vouchers must be registered with Ofsted. In addition, there is a limit to the amount of vouchers you can receive that will qualify for Income Tax and National Insurance exemption - at present up to a maximum of £243 per month. This is irrespective of the number of children you have.

Both parents/guardians can take advantage of the saving, but will have to arrange with their employers on a separate basis.

For more information regarding childcare vouchers and providers please click here. 

 

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