There are a number of changes to maternity, tax and other benefits which will have implications for working families.
Some of the changes include additional paternity leave, an increase in maternity, paternity and adoption pay and changes in working tax credits as well as changes to nursery vouchers. The Government has indicated that there will be a 3-year plan on new employment regulations for small businesses with fewer than 10 staff, but unfortunately it is not yet clear whether this will affect changes coming in in April.
Some of the changes are:-
Maternity and Paternity Pay
Maternity, paternity and adoption pay will rise from 3 April from £124.88 a week to £128.73.
Working Tax Changes
With several changes being announced in the Government’s spending review that come into effect in April, include:
- reduction of the childcare costs that parents can claim through the childcare element of the Working Tax Credit (WTC) from 80 per cent to its previous 70 per cent level in April 2011
- changing the eligibility rules so that couples with children must work 24 hours a week between them, with one partner working at least 16 hours a week in order to qualify for the WTC
- freezing the basic and 30 hour elements of the WTC for three years from 2011-12
- increasing the child element above indexation by £30 in 2011-12 and £50 in 2012-13
- removing the baby element of tax credits from 6 April. Families with one higher rate tax payer will lose child benefit, whilst the benefit will be frozen for three years for everyone else.
Additional Paternity Leave
Fathers of babies born on or after 3 April will have the right to take up to 26 weeks’ additional paternity leave on top of their two weeks’ ordinary paternity leave if the mother of their child returns to work before the end of her maternity leave.
They will be able to share her statutory maternity leave in the first nine months when SMP is payable. Also coming in from 6 April companies can positively discriminate in favour of someone from a group which is under-represented in their firm when candidates are equally qualified. This includes positive discrimination on the grounds of sex and falls under the Equality Act.
Childcare Vouchers
Childcare Vouchers are exempt from tax and National Insurance contributions up to £243 a month for everyone.
After April 2011, people paying higher and additional rates of tax who join the voucher scheme will only be able to make the same tax savings as those paying basic rate tax. In practice, this involves limiting the amount of tax exempt vouchers that higher and additional rate tax payers will be able to receive.
Useful Links
- Paternity Leave
- Parental Leave
- Sure Start Maternity Grant
- Child Benefit
- Child Trust Funds
- Tax Credits
- Childcare Credits
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