Tax Credits

fiveyearplan

I know I've been on this forum long enough to know the answer to this question but.....

I've just become aware that I may be eligible for working tax credit and child tax credits. Are these considered income for IPA purposes?

blind-as-a-bat_2

Yes im afraid give me a min to dig the relavent bit out

blind-as-a-bat_2

31.7.9 State benefits

April 2008

Whilst an IPA should not be sought where the bankrupt's only source of income is state benefit [note 3], the official receiver should not automatically discount the possibility of obtaining a contribution from a bankrupt who has surplus income but is also in receipt of benefit. Any calculation to identify surplus income should include all available income, including state benefits, paid to an individual for the general benefit of that individual and their family. This includes child tax credit, which is also a state benefit and comprises part of the income available to the bankrupt and his/her family, against which an IPA can be calculated. The person making the income and expenditure calculation (usually the examiner) should initially ascertain whether the bankrupt is also in receipt of non-benefit income. If this is the case, an IPA should be considered, the total income should be established (see other income sources at paragraph 31.7.7) and the bankrupt's reasonable expenses deducted (see paragraph 31.7.19) to cover his/her reasonable domestic needs. An assessment can then be made as to whether the bankrupt is in receipt of surplus income. If an IPA is to be sought, any surplus should be less than or equal to income from the source other than benefits. It should be remembered that whilst the bankrupt's total income (including state benefits) should be included in the calculation of surplus income, it is the income from sources other than the benefit(s) which is providing the payments under the IPA/IPO, which is why an IPA should only be sought to the extent of the non benefit income.
The only exception to the inclusion of state benefits in an income payments calculation is where a bankrupt is in receipt of child benefit, which is not an income based benefit (unlike child tax credit, see above). The High Court has stated as a matter of public policy that child benefit should not be included in the statement of income when applying for an IPO and there is no reason why the same principle should not be extended to cover IPAs.

Where a bankrupt’s income solely comprises state benefits, it is unlikely that a surplus will arise except where they are in receipt of non-means tested benefits, for example Disability Living Allowance. The official receiver should consider that it is always open to the bankrupt who has a surplus and wishes to contribute, to make voluntary payments. If the bankrupt was minded to contribute on a voluntary basis, having been informed that their income appeared to be sufficient to produce a surplus taking in to account their reasonable domestic needs, a voluntary agreement could be incorporated into an IPA, but it would have to be clearly noted that no enforcement action would be taken if the bankrupt failed to make agreed voluntary payments.

The Department of Work and Pensions website provides useful information regarding allowances and benefits currently in force and can be accessed at http://www.dwp.gov.uk/.


but bear this bit in mind

fiveyearplan

Thanks BAAT, don't think I'll want to volunteer to pay any extra! I also don't think the benefits will take me above the threshold for paying an IPA.

Broken_hearted

Does anyone else miss the old family credit system, it never seemed as complex.

fiveyearplan

I'm not sure what the old family credit system was but one thing that scares me about applying for working tax credit and child tax credit is how many times I've heard on here that people were overpaid and had to pay it back! That just may put me off claiming altogether!

blind-as-a-bat_2

Broken_hearted wrote: »

Does anyone else miss the old family credit system, it never seemed as complex.

Thats why they got rid of it so you cant tell if they have got your award wrong or when they claim you have been paid too much you wont be able to find out if you have

covers a multitude of c0ckups;)

No idea where i get the reputation of being cynicle from

fiveyearplan

Next I need to look into Council Tax benefit. I can't believe I may be eligible for this too!

Richard_S

blind-as-a-bat wrote: »

No idea where i get the reputation of being cynicle from

Nothing cynical about that Bat,:rolleyes:

It's the first thing a politician learns; if it works change it, or better still replace it all together.:rolleyes: :rolleyes:


Second thing; if it's not working, don't replace it; make it worse.:rolleyes: :rolleyes:

blind-as-a-bat_2

You missed the bit about employing 5 staff and 50 manegers to achieve it Rich;) :rolleyes:

Broken_hearted

Third how to make it work to line their own pockets.