Working Tax Credit and leave when you have a child
You don’t have to wait until you go back to work to claim Working Tax Credit. This is because the Revenue will treat you as if you are working during:
- the first nine months of maternity leave; or
- the first nine months of adoption leave; or
- paternity leave; or
- shared parental leave where you get Statutory Shared Parental Pay, or would get it if you met the conditions
- any period when you get Statutory Maternity Pay (SMP), Maternity Allowance (MA), Statutory Paternity Pay (SPP) or Statutory Adoption Pay (SAP).
You will be treated as working the same number of hours a week as you were immediately before your leave or the period of payment began.
This also means that you can claim the childcare element of Working Tax Credit to help with the costs of registered or approved childcare if you are single and previously worked 16 hours or more per week. If you have a partner, your partner must also work 16 hours or more a week, or be a carer for a disabled person, or getting disability or sickness benefits. Again, whether or not you will get this help depends on your income.
All your Maternity Allowance and £100 a week of any Statutory Maternity Pay, Statutory Paternity Pay, Statutory Shared Parental Pay or Statutory Adoption Pay is ignored as income for tax credits. This means you may either get an underpayment at the end of the tax year (because your income is less than expected), or you could ask the Tax Credit Office to base your award on an estimate of the current tax year’s income. You should tell the Tax Credit Office (part of HMRC, her Majesty’s Revenue and Customs) when you have had more than 39 weeks of maternity leave, and let them know what you are doing, to make sure you do not get overpaid. See GOV.UK to get in touch with them.