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  • FIRST POST
    • LincsPaul
    • By LincsPaul 16th Jun 17, 12:30 PM
    • 70Posts
    • 24Thanks
    LincsPaul
    Working Tax Credits
    • #1
    • 16th Jun 17, 12:30 PM
    Working Tax Credits 16th Jun 17 at 12:30 PM
    I'm owed some working tax credits from the previous tax year, which are only being paid to me now (<£500). Went BR a few weeks ago. Do I need to tell the OR about the money or can I spend it on rent/household as it's supposed to be? Benefits are at present my only income, although WTCs stopped when I stopped working.

    Thanks
Page 1
    • LincsPaul
    • By LincsPaul 18th Jun 17, 6:58 PM
    • 70 Posts
    • 24 Thanks
    LincsPaul
    • #2
    • 18th Jun 17, 6:58 PM
    • #2
    • 18th Jun 17, 6:58 PM
    Anyone?
    • luvchocolate
    • By luvchocolate 18th Jun 17, 7:25 PM
    • 1,375 Posts
    • 1,205 Thanks
    luvchocolate
    • #3
    • 18th Jun 17, 7:25 PM
    • #3
    • 18th Jun 17, 7:25 PM
    You will have to inform the O.R....it will be up to them what happens I think.
    • LincsPaul
    • By LincsPaul 22nd Jun 17, 10:45 AM
    • 70 Posts
    • 24 Thanks
    LincsPaul
    • #4
    • 22nd Jun 17, 10:45 AM
    • #4
    • 22nd Jun 17, 10:45 AM
    Do you know what, I'd like to bring this up again. If I had to hang on to wait for benefits because they needed to wait until the end of the tax year, and now they've paid me what I was rightly entitled to I'm not sure I should inform anyone - because I need the money and will be paying bills etc which is what it's meant for?

    I notice elsewhere on the board someone's car was exempt from the BR and now they want to sell it some people are saying they can keep the money and put it towards public transport. Fairly similar situation?
    • LincsPaul
    • By LincsPaul 22nd Jun 17, 11:11 AM
    • 70 Posts
    • 24 Thanks
    LincsPaul
    • #5
    • 22nd Jun 17, 11:11 AM
    • #5
    • 22nd Jun 17, 11:11 AM
    In fact I have just found the answer to my question...

    http://forums.moneysavingexpert.com/showthread.php?t=4892244

    So think I'm ok!

    This may be helpful to others (and thanks to Debt Doctor 2014).
  • National Debtline
    • #6
    • 22nd Jun 17, 11:19 AM
    • #6
    • 22nd Jun 17, 11:19 AM
    Hi LincsPaul,


    First of all, in a situation like this, you must declare the money to the Official Receiver, which will be outlined in the fine print of the bankruptcy order that you are obligated to do so.

    Whether or not the OR will take this money, will be at the discretion of the OR I am afraid. If you can demonstrate that the money is need for essential household items and is from backdated benefit they may not take it. Unfortunately, I couldn't find anything in the technical manual that referenced backdated benefits specifically, but the technical manual does state that the OR can take money given through a tax rebate. So, applying the same reasoning, unfortunately, this money may be taken.


    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • LincsPaul
    • By LincsPaul 22nd Jun 17, 1:32 PM
    • 70 Posts
    • 24 Thanks
    LincsPaul
    • #7
    • 22nd Jun 17, 1:32 PM
    • #7
    • 22nd Jun 17, 1:32 PM
    From the manual:

    30.113 Tax credits

    Where a bankrupt receives arrears of tax credits for a period prior to or post the date of the bankruptcy order, the tax credits are only available to the trustee once they are paid to the bankrupt and therefore notwithstanding the fact that the payments may relate to a period prior to the bankruptcy order the funds do not automatically vest in the trustee. The tax credits should be treated as part of the bankrupt’s income and be included in any calculation for an IPA/IPO. Any lump sum received can also be claimed through an IPA/IPO when received by the bankrupt. It is possible to claim the lump sum as a ‘single payment’ IPA/IPO but consideration needs to be given to the reasonable domestic needs of the bankrupt and his family. This applies equally to Child Tax credits and, other tax credits, (see Chapter 31.7).


    I'm unemployed and outgoings - basic rent and food - are way above the amount I get in benefits, even after including this one-off couple of hundred pounds backpayment, so reading the above, the chances of a one-off or regular IPA/O being applied being are still zero.
    Last edited by LincsPaul; 22-06-2017 at 1:35 PM.
  • National Debtline
    • #8
    • 22nd Jun 17, 5:46 PM
    • #8
    • 22nd Jun 17, 5:46 PM
    Thank you LincsPaul for finding this, and posting it for other posters for next time.


    If I may just add to my earlier post, I didn't believe the lump sum would automatically vest to the OR or trustee and that it would be discretionary. When you declare this money to the OR, hopefully, it should be quite straight forward. However, if the OR gives any indication they may try and take the money, you could quote this part of the manual to them. Because you are on a benefit only income you shouldn't be subject to an IPA anyway.


    I apologise if I have caused any confusion and am glad you have found your answer. Good luck,


    Laura
    @natdebtline
    Last edited by National Debtline; 22-06-2017 at 5:54 PM. Reason: wording
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • LincsPaul
    • By LincsPaul 22nd Jun 17, 9:12 PM
    • 70 Posts
    • 24 Thanks
    LincsPaul
    • #9
    • 22nd Jun 17, 9:12 PM
    • #9
    • 22nd Jun 17, 9:12 PM
    Thank you LincsPaul for finding this, and posting it for other posters for next time.


    If I may just add to my earlier post, I didn't believe the lump sum would automatically vest to the OR or trustee and that it would be discretionary. When you declare this money to the OR, hopefully, it should be quite straight forward. However, if the OR gives any indication they may try and take the money, you could quote this part of the manual to them. Because you are on a benefit only income you shouldn't be subject to an IPA anyway.


    I apologise if I have caused any confusion and am glad you have found your answer. Good luck,


    Laura
    @natdebtline
    Originally posted by National Debtline
    Thanks Laura and I understand - yes, I/others probably 'should' inform OR to ensure all bases covered... If anything comes of this I'll let you all know.
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