International Men’s Day
It’s International Men’s Day (IMD), celebrated in over 100 countries across the world to recognise the contribution men make to those around the them, their family and friends, their world place and the community, the nations and the world. We are marking this event by championing all of the men who are doing what they love as contractors through their own Limited Companies.
In particular we will look at the rights men have when it comes to paternity pay and how they can support their families once they go back to contracting after paternity leave.
What are the rules surrounding payment?
To be eligible for Statutory Paternity Pay (SPP) you must be either the child’s biological or adoptive parent.
How much and when can you expect to be paid during paternity leave?
As a contractor of course you can make arrangements to take time out of contracting for as long as you wish and it’s a good idea to make provisions to ensure you have enough money to put aside to cover these periods when you are not earning. But the good news is, you can claim SPP for up to two weeks of paternity leave. You can expect to be paid within eight weeks of the biological child’s birth date, or the adopted child’s date of placement within your family.
If you take either one to two week’s paternity leave, it can be taken with SPP of 90% of your average weekly earnings (AWE), or £139.58 (whichever is lower). Make sure you let your contractor accountant know of the expected date of arrival, so that they are prepared to start your SPP payments.
What you should do if SPP isn’t enough to support you and your family
If you are worried that 90% of your SPP won’t be enough to support you and your family for the duration you wish to take, there are a few things you can do in order to make yourself more financially comfortable:
- try to sync a break in contracts (as best you can!) with your child’s arrival date – that way you will therefore suffer little or no unexpected financial impact
- budget for the time you expect to be off of work, save 5% of your monthly income over a period of seven months, to cover each week you wish to take off for your paternity leave
Caring for your child doesn’t just end the second your paternity leave stops. When you return to work, finding suitable childcare can be a real challenge. In the Summer Budget the Government announced they will be giving free childcare to working families with three and four year old children from September 2017 (increasing from 15 to 30 hours).
In addition to this the Childcare Voucher Scheme will continue until early 2017 when the new tax free childcare is to be introduced.
Being a contractor and Dad should never be a ‘one or the other’ scenario and Intouch Accounting help out by providing all the support and guidance you’ll need when considering your working options whilst starting a family. Our team of specialist Personal Accountants are on hand to answer any questions our clients have and can advise on the best working practice from the moment you find out you’re expecting, through to childcare and beyond.
Call our team of advisers on 01202 375 562 to discuss joining Intouch Accounting today.
This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.