Tax Credits Advice - Big change in circumstances

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italianie
italianie Posts: 70 Forumite
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edited 17 March 2018 at 9:00PM in Benefits & tax credits
I'm being made redundant beginning of May where our household income will take a big hit loosing my salary of approx £38,500 a year. My wife is working but she is only part time earning approx gross £10,920 on 25 hours a week.. We currently don't get much in the way of tax credits, but as I might be out of work for a sometime were hoping we might be able to claim some child or working tax credits to help ease the sudden loss of income. We have 3 children ages 17, 15 and 8.

My questions are :

  1. Do we just phone up the tax credits office to report the big salary drop, will they reassess it for us straight away, rather then waiting till the next year, considering the big salary loss?

  2. Are we likely to get much in the way of tax credit help with the big loss of income?

  3. If we do get reassessed, do they factor in the previous years earnings, as I saw online they compare your present tax year / to your previous years earnings? This seems rather odd if someone looses their job and takes an immediate big salary loss. I'd have thought they'd judge the award on what our actual house hold income is at the time with such a big drop?

I'd really appreciate any advice, I'm rather anxious we might not be able to pay the bills if we don't get some extra support, it's a big drop in our household income and I'm not likely to earn the same money elsewhere as my job is very niche and I might be out of work for sometime and even have to sign on for the first time in life!!

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  • xylophone
    xylophone Posts: 44,422 Forumite
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    I'm being made redundant beginning of May

    Redundancy payment? This should help tide you over.

    https://www.moneyadviceservice.org.uk/en/articles/benefits-and-tax-credits-when-youve-lost-your-job
  • missmontana
    missmontana Posts: 1,994 Forumite
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    Have a look at
    https://www.turn2us.org.uk

    if you put in all your details as they will be from May, it will let you know what you're entitled to.
    Child benefit, as you'll be under the threshold, tax credits, any JSA, housing allowance etc.
    Now would be a good time to start looking at all your bills and cutting back where possible.
    Be who you are, say what you feel, those who mind don't matter, those who matter don't mind.
    They say that talking to yourself is a sign of mental illness. So I talk to the cats instead.
  • italianie
    italianie Posts: 70 Forumite
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    edited 16 March 2018 at 11:07PM
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    xylophone wrote: »
    Redundancy payment? This should help tide you over.

    https://www.moneyadviceservice.org.uk/en/articles/benefits-and-tax-credits-when-youve-lost-your-job

    Yeah sorry, I didn't want to confuse this post, as the lay off money is nearly all going into the mortgage, in order to live on a reduced income (as unless I get really lucky, I probably won't be earning for a while and when I do find work, I'll probably be on a less then 50% of what I earned before, it's complicated), so the lay off money goes overnight into the house and paying off a loan with just a little left to tied us over a bit. No complaints on that front, I'm fortunate to get this and it helps a lot, but the bills still needs paying in the longer term.

    I'm just concerned about how life will be after this happens and what support we may get if we struggle a bit. Really I just wanted to know the technicalities of how the tax credits might work. So many things to think about, tax, signing on, finding work, paying bills, clearing debts. Heads a bit of a shed.
  • Icequeen99
    Icequeen99 Posts: 3,775 Forumite
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    Are you currently receiving some tax credits?

    You will be able to get reassessed quite quickly, the first 2,500 of fall in income will not counted. Of course, you will have your April and potentially May Salary to add to your annual income. However any taxable element of redundancy pay will also count as income.

    You will need to work out your estimated income for 2018/19 to report to HMRC when the time comes. They will then reassess your tax credits based on that estimate + 2.500.

    IQ
  • italianie
    italianie Posts: 70 Forumite
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    edited 16 March 2018 at 11:29PM
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    Icequeen99 wrote: »
    Are you currently receiving some tax credits?

    You will be able to get reassessed quite quickly, the first 2,500 of fall in income will not counted. Of course, you will have your April and potentially May Salary to add to your annual income. However any taxable element of redundancy pay will also count as income.

    You will need to work out your estimated income for 2018/19 to report to HMRC when the time comes. They will then reassess your tax credits based on that estimate + 2.500.

    IQ

    Thanks yes, we do get some child tax credits now, a small amount not much. Yes I got told about declaring the taxable part of redundancy money, otherwise I think they'll deduct over-payment's from the next years award. It's hard to estimate, because no idea if I'll find work and how much I'll be earning, so probably just going to estimate wife income, + taxable redundancy for the re-assessment, the April pay and few days of May pay.
  • skcollobcat10
    skcollobcat10 Posts: 331 Forumite
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    Do you have insurance to cover mortgage payments? We paid a monthly insurance to safeguard our mortgage and when we needed it company paid out 125% monthly for 2 years.
  • FBaby
    FBaby Posts: 18,367 Forumite
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    We currently don't get much in the way of tax credits,
    Confused why you are getting any at all on your current joint income.

    Why are you already assuming that you won't be able to get a job, unless you are planning not to look for one?
  • italianie
    italianie Posts: 70 Forumite
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    edited 17 March 2018 at 9:03PM
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    FBaby wrote: »
    Confused why you are getting any at all on your current joint income.

    Why are you already assuming that you won't be able to get a job, unless you are planning not to look for one?

    I know we get child benefit, actually I'm not sure if we do get any tax credit anymore, my wife gets the benefits and I've always left it to her. I know we used to get a small amount of child tax credit when my wife was not working based on my salary alone, she only got a job very recently (past month) after trying for a long time to find work, she struggles with interviews. I've already put 3 job applications that would pay me less then half of what I earn now but happy to survive on less, I just don't have many skills or qualifications, my current salary is based on my length of time in the organisation. I'm probably selling myself short. I am 100% planning to work, just worrying about the transition of being made redundant.
  • sovsov1357
    sovsov1357 Posts: 38 Forumite
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    Check out the Citizen's Advice website, or go see someone at the Citizen's Advice or go online to the CA or call the CA! They should be able to do some better off calculations for you...
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