Big drop in income and tax credit entitlement
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Wangeye08
Posts: 13 Forumite
Hi all
I'm hoping that someone that's been in the same boat as us might be able to help.
We are a couple who between us earn £47k a year. Unfortunately my wife, who is the main breadwinner is suffering chronic headaches and is currently undergoing hospital treatment for these. Due to this she is unable to continue with her current full time management role.
She is planning to reduce her hours and take a demotion. However, this leaves us with a new income of £24250 a year. A large drop.
She's contacted the tax credit helpline, but they cannot advise on entitlement with regard to future changes. They mentioned some sort of tapered payments, but couldn't help more than that.
Without the help of tax credits, we simply cannot afford the drop in income, yet my wife cannot continue working as she is either. It seems the only way to get any sort of payment is to make any changes first and then claim afterward.
Has anyone been through anything similar, and what was the outcome?
I'm hoping that someone that's been in the same boat as us might be able to help.
We are a couple who between us earn £47k a year. Unfortunately my wife, who is the main breadwinner is suffering chronic headaches and is currently undergoing hospital treatment for these. Due to this she is unable to continue with her current full time management role.
She is planning to reduce her hours and take a demotion. However, this leaves us with a new income of £24250 a year. A large drop.
She's contacted the tax credit helpline, but they cannot advise on entitlement with regard to future changes. They mentioned some sort of tapered payments, but couldn't help more than that.
Without the help of tax credits, we simply cannot afford the drop in income, yet my wife cannot continue working as she is either. It seems the only way to get any sort of payment is to make any changes first and then claim afterward.
Has anyone been through anything similar, and what was the outcome?
0
Comments
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A lot will depend on your circumstances and when the drop happens. How many children do you have? Any childcare costs? Disabilities?
When do you expect the fall in salary to happen?
Tax credits will disregard the first 2,500 fall in income, and your wife's higher salary for part of the year will be taken into account so it could be over a year before your tax credits catch up and even then they won't come close to replacing the lost income.
IQ0 -
We have two children, no disabilities
I realise that tax credits will not come near to covering the lost wage, just trying to work out what the entitlement might be. I went on the entitledto website, which gave me an idea, I'm just concerned about this tapered payment0 -
when you initially apply it will come back with a zero award based on the previous years income but you can then contact with an estimate of this tax years household income which would then have £2.5k added to it (the first £2.5k of a drop is disregarded) If the £24,250 is the total for the tax year (including your wife's higher income to date) then the award would be based on an income of £26,550
https://www.gov.uk/government/publications/tax-credits-entitlement-table-working-at-least-16-hours-and-no-childcare/tax-credits-entitlement-table-working-at-least-16-hours-and-no-childcare0 -
How many hours do you both work? Any childcare?0
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