Parents confused into missing out on £1,000 benefits a year

The cost of bringing up kids means most parents appreciate all the financial help they can get. However, a new study has revealed that almost half of them are so confused by the array of state benefits available, that they have no idea whether they are eligible for any help - or how to go about claiming.

The figures came from the LV= Cost of a Child study, that found that bringing up a child to the age of 21 now costs an eye-watering £231,843, and absorbs more than a third of the average household's income. The very early years are particularly expensive, and very few parents can make it alone.

Fortunately, the vast majority of parents are entitled to some help. Citizen's Advice has a useful introduction outlining the kinds of help you may be able to get.

What is available?

All parents who earn less than £60,000 a year qualify for Child Benefit. Based on income levels, three quarters (76%) of parents are eligible for this benefit, but only six in ten (61%) claim it.

Child Benefit provides parents with £1,076 a year for the first child, and with the cost of raising a child now averaging more than £11,000 a year, it could offer families significant support.

Those on very low incomes may also be able to get a maternity grant of £500 from the Social Fund, to help with the cost of a new baby - providing it is your first child.

You may also be able to claim Child Tax Credit. This may be available to people who are unemployed and those in work, and will depend how much you earn, and whether you have other children.

If your child is disabled you may be entitled to a higher payment. You may also be able to get the Disability Living Allowance for the child, and extra payments through other means-tested benefits such as Housing Benefit and Council Tax Reduction.

If you use childcare and you are in work - and on a low income - then you may be able to get some help with childcare costs through the Working Tax Credit. All parents should also check if their employer offers childcare vouchers, which enables them to get some tax relief on childcare costs.

There are other benefits for parents on very low income, including free school meals and help with the costs of school uniform.

LV= also found that a third (32%) of parents would need to rely on state benefits if the main breadwinner was unable to work due to illness or injury, but three in ten (28%) say they wouldn't know how to claim Employment and Support Allowance.

The introduction of Universal Credit will bring yet more change. In some places, it will already have replaced Child Tax Credit. Eventually it is designed to make the benefits system more straightforward, but will mean parents have to get their heads around something completely new.

Confusion

With previous LV= research showing six in ten (60%) parents are struggling with their finances, LV= is asking the government to make the rules around state benefits clearer, so parents can understand what state support they are entitled to and how to claim.

Myles Rix, Managing Director, Protection at LV= said: "It's worrying that so many parents are confused by the system and aren't taking advantage of the support they're entitled to."

If you are confused by the system, and want to check whether you are entitled to any help. It's always worth starting with organisations like Citizens Advice and Stepchange, who have specialist advisers who can guide you through the system, help you understand the help that's available, and even help you apply for them.

Rix adds: "We urge parents to think about putting a financial safety net in place to help them if they're unable to work, as while state benefits are important they are not guaranteed and often only provide the most basic support."