Assessing Impact of working less hours

M

mreg

Guest
Age: 29
Spouse’s/Partner's age: 31

Annual gross income from employment or profession: 26,000
Annual gross income of spouse: 60,000

In general are you:
(a) spending more than you earn, or
(b) saving? B Saving

Other borrowings – Mortgage 750 per month
Rough Monthly Out Goings
Shopping 1,200
Creche (*for 3 children*) 1,600
Direct Debits Broad band,
Insurance etc 400
Miselaneous 500
Do you pay off your full credit card balance each month?
If not, what is the balance on your credit card?

Savings and investments: 70,000

Do you have a pension scheme? Yes

Ages of children: 3, 2 and 4 months

What specific question do you have or what issues are of concern to you?

I am currently on maternity benefit with our third child. At this point it’s obvious to us that I will not be able to return to work full time and still run a home. My husband works long hours and is often away so for him to help more is not an option.
I am not good with tax bands and working out take home pat etc so I am hoping you can help.
(a) If my employer was to allow me to have a three day week how would this impact my take home pay and the tax credits available to me and my husband. Will there be actually much of a difference to what we take in today.
(b) It is rumoured that there could be a redundancy in my department there is a chance that it could be me. I’m not sure if this would actually be a good thing or a bad thing for me. I am nearly 10 years in my current position so I would get a lump sum. Getting another job would be difficult so I am wondering would I be eligible to collect the dole or whatever it’s called now until I could source a new job.
I would appreciate any help you could give me
 
If you went on a 3-day week your earnings would be 26k x 3/5 presumably, which would be 15,600 gross?

How much is / would be your pension contribution?

My rough calculation assuming a pension contribution of 6% of gross: you'd be down about €129 weekly, and your husband would benefit from additional credits / cut-off point to the tune of €16 p.w/ - an aggregate of €113 less of net income per week. Which could be recouped from the creche costs foregone? (1600 x 12/52 x 2/5 = 147.)
 
Regarding redundancy question, if you are looking for a new job you would be entitled to jobseekers benefit for approx 1 year, there may be an initial disqualification period depending on the amount of your redundancy. After you exhaust your entitlement to jobseekers benefit and you have not found work then you could apply for jobseekers assistance (dole) but you will be unlikely to get anything as it is means tested so your husband's income will be taken into account.
 
thank you guys for your replies, based on your posts it looks like there is no point in me working 5 days.

THe pension contribution for me is now 8%, what would happen to this if I was made redundant or went on a three day week

M
 
I think Mandelbrot was assuming that your contriution to your pension was 6%. It sounds like your employer contributes 8% from what you are saying, do you contribute also?

If you reduced to a 3 day week, the 8% percentage should stay the same, but obviously it would apply to a smaller amount as your monthly salary would be reduced.

I believe your employer will have to wait until you return from maternity leave before making you redundant. I would not entertain moving from 5 to 3 days at this point as your lump sum would then be based on the new, lower salary, so it would not make sense. If you do need to return to work before the redundancy happens, one option you could investigate would be taking an unpaid parental leave day to reduce to a four day week, while maintaining your official salary at your pre-maternity level.

If your youngest is 4 months now, presuming you would be returning to work when they are 9 months old, if you got redundancy then you would be eligible for JB for the next year (if you find something that pays for the 3 in creche then great, otherwise at least you'd have some income), you could then use the redundancy to support yourself for the year after that, by which stage your youngest would be almost 3 and your eldest (possibly both your older children depending on age) would be in school. At that point, your childcare bill should have reduced to a level that makes it lot easier to find employment that works for you.
 
If you reduce your hours and get made redundant then your redundancy payment will be based on your new, reduced, salary. This of course will result in a significantly reduced payout, so beware.
 
thank you guys for your words of warning on the redundancy. Have heard more rumours and there is a good chance I will be made redundant. Based on that I dont think I will try and get a three day week.

But I am very worried to be losing my job. A colleague mentioned that I may be entitled to a carers allowance. Does anyone know what this is or if I would be entitled to it

Thanks again
 
Home Carer's tax credit maybe they mean, carer's allowance is if you are caring for an incapacitated person.
 
It's been decided I will be made redundant, I will begetting redundancy, does anyone know if I will have to pay tax on theredundancy payment or how this works :(
 
Yes, a large part of redundancy pay is free of tax. You can get information at revenue.ie. Your employer will also provide you with information on the tax side.

Sorry to hear you are being made redundant. Make sure you claim jobseeker's allowance from the day you are let go. I presume you are looking for another job.
 
On a salary of €26k you need to assess whether or not it is worth your while going back for this amount of money. Like you my wife was made redundant when she was on maternity leave and when she finished up we found we had more money in our pockets than before as we did not have to pay childcare. I only have 2 children but unless somebody looks after your 3 kids then you may be better off at home for now until they go to school. 1600*12 is €19,200 and when you add the cost of getting to work and lunches, work clothes etc you are probably end up in a situation where its costing you money have a job. If you do wish to have a job then I would suggest you aim for a much higher salary than you currently have. Easier said than done I know.
 
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