What are the financial implications associated with your newly-formed blended family?
How can you resolve the financial issues that typically arise as the result of forming a blended family with your new partner? It’s not as easy as you might think. Fortunately, our tips will enable you to continue viewing your new relationship through rose-tinted glasses and help you become the best step-parent in the world! At least, that’s the idea.
What effect will your new family circumstances have on your Growth Package or Child Benefit entitlement?
Your Growth Package or Child Benefit entitlement may change as the result of forming a blended family. This depends on a variety of different factors. Such as where you live, who receives your partner’s Growth Package payments, with whom the children are domiciled, your scheme's rules on co-parenting, when the children were born and whether you now have a child with your new partner, etc.
We therefore recommend contacting your KidsLife adviser for more information. We compare the most common scenarios on our Frequently Asked Questions co-parenting page, which is definitely worth checking out.
Am I still entitled to a Social Allowance?
The Social Allowance is an additional amount that low-income families receive on top of their Child Benefit. Your Social Allowance entitlement depends on where you live, your family income and your family circumstances. You'll normally receive your Social Allowance on top of your Child Benefit automatically. Or we'll send you a document which investigates your entitlement to this particular allowance.
Keen to know where you stand before you start cohabiting with your new partner? No problem! Simply submit an application and KidsLife will examine your Social Allowance entitlement.
Did you know that a Social Allowance for middle-class families with three children is now also available? You might qualify for this due to your newly-formed blended family. You can explore the conditions for this here.
The more dependent children you have, the greater your tax benefit
Who are your children dependent on - you, your ex-partner or both? Each scenario results in a different tax benefit:
- The children are your dependants: this means that you can deduct the associated payments from your tax. The more dependent children you have, the greater your tax benefit. But that could be to the detriment of your ex. How can you compensate them? For example, by distributing the dependent children equally between you and your ex, as Katrien does in the example below.
- The children are not your dependants: you might pay child maintenance in this case. You can also deduct this from your tax, which is good to know!
In order to maintain a balance in terms of tax benefits between you and your ex, you should consider which tax scheme is the most beneficial for your particular circumstances and will avoid any potential resentment.
An up-to-date overview of the tax-free amounts can be found on the FPS Finance website.
Unexpected financial benefits
Blended families typically entail more costs, such as a larger house, bigger shopping bills, higher energy costs and possibly the purchase of a more spacious family car, etc. But there’s no need to panic - we’ve compiled some smart budget management tips that will enable you to save a considerable amount each month.
A large family (with at least three children residing under the same roof) can also incur some financial benefits:
- Discounts for large families: travel by train or bus and enjoy a special discount for large families. Think that theme parks are out of your price range? Not necessarily. Many theme parks offer discounts for large families. As do nurseries and babysitting services, etc.
- Discounts at sports clubs, youth organisations and summer camps: you'll often pay less for a second child from the same family.
- Cheaper loans: perhaps you're looking for a bigger house to accommodate your recently expanded family? You can apply for a social housing loan or find social housing that's suitable for large families via the Vlaams Woningfonds
“The children benefit from the child allowance, and each parent benefits from tax deductions.”
Katrien formed a blended family with her boyfriend and their four children (two of which are Katrien's and two of which are his) six years ago. The management of their family budget evolved organically, without much consultation. Katrien and her boyfriend have a joint current and savings account, as well as their own personal accounts. “After my divorce, I insisted that we each retain our own personal bank accounts. We pay for clothes for our own children with our own money. And we discuss how to pay for presents, including with our ex-partners.”
Katrien made firm financial agreements pertaining to child benefit and tax benefits following her divorce. “We didn't really argue about it. We're both lucky enough to have good relationships with our ex-partners. They even pop by for an occasional drink (laughs).” She also agrees with her ex, how much pocket money the children should get. “When my daughter started secondary school, she opened her own bank account. My ex and I each deposit 10 euros per month into this bank account.” The amount of pocket money does differ between her children and that of her boyfriend. “As far as I'm concerned, things needn't be exactly the same.”
Katrien understands that the distribution of tax benefits could give rise to resentment. “My boyfriend and I are well aware that we enjoy greater tax benefits as a result of all four children residing under our roof. That's why we decided to compensate our ex partners. Each parent now has a dependent child, which ensures that the tax benefit is distributed equally. The children benefit from the child allowance, and each parent benefits from tax deductions. But I'm aware that what works well for us, might not be the best solution for every family.”
Ever considered switching to a new Growth Package or Child Benefit partner? No problem!
