WFTC and Child Benefit

[Deleted User]

Hi All,

I know this is a very repetitive question but i can't find the answers I am looking for in the search facility.

Bf and I are planning to try for a baby in February. I am already saving and have looked at budgets etc. I know child benefit is £17 p/w but i'm having a real hard time trying to figure out if we will be entitled to any Working Tax Credit or Family Credit.

I've looked at the entitledto pages as recommended and attempted to fill them in but got soooo confused. I don't think I had enough relevant information.

As a rough guide please can you tell me what these credits are, how you qualify for them and do they take into account the money we both earn full time now or the money we will earn when I go part time.

Thank you so much for your help.

Bailey

CIS

Best thing is to try the IR's own Tax Credit enetitlement calculator, its very straightforward.

https://www.taxcredits.inlandrevenue.gov.uk/Qualify/DIQHousehold.aspx

Tax credits take in to account your complete annual income, so if you where a high earner before you give up work, you may find you reduce any entitlement to the minimum.

jellyhead

are you planning on giving up work once you have the baby, or not? it will make a difference. sometimes you can get them to base it on what you expect for the current year, rather than what you earned in the previous year. this might make a difference if you're entitled to the surestart grant because it has to be claimed before baby is 3 months old. say you get pregnant straight away and have a baby around xmas time. if you're giving up work, or even taking a long maternity leave (i don't think they class smp as income, or maybe they ignore the first £100 a week of it, something like that) it could affect what you're entitled to.

i just had a baby and have made friends with other mums. some have given up work and it was better for them to base it on the current year as their joint earnings were low enough to claim the surestart grant and some tax credits (in addition to the family and baby elements). one woman didn't give up work but having some of her maternity money disregarded meant it was also better for her to use the current years money. depending on when maternity leave is taken it could fall into two tax years so the first two years tax credits could be different to what you'll get long term.

in general with one baby and no disability there are two thresholds. if between you you earn more than around 56 thousand you won't get anything. between 25 and 56 you'll get the family element each year (£547.50 a year) and baby element (an extra £547.50 for baby's first year. this is paid monthly so unless your baby is born in april it will be split over 2 tax years. so that's around twenty a week for the first 12 months and ten a week after that.

if your joint income is under 25 thousand (you can disregard the first hundred a week of smp, remember to add on any benefits in kind such as company car) you get the baby and family elements and some extra child tax credit. this extra amount means you're entitled to a grant of £500 too, but you have to apply for it (surestart grant) before baby is 3 months old. you can get help towards childcare too.

these thresholds are only a generalisation, i'm no expert so somebody else can probably tell you more. if you want to post details of your income then somebody will be able to give you an idea. sorry i've rambled lol!

[Deleted User]

Thank you both for your kind replies.

I guess I become unstuck when trying to work it out as I'm not sure whether to base it on what we earn now or what I will be earning.

I intend on working approx 18 hours and 1 sleeping p/w. I currently work 37 hours and 1 sleeping per week (£21k) and bf earns £31k, combining our income at the moment means £52k.

Obviously with my reduced hours we would probably earn approx £40k maybe a bit less.

Can anyone help me a bit more with this please?

I will look at the link offered too.

Thanks.

CIS

On £40K you will almost certainly get the minimum award, that being £547 family element and for the 1st yr, the £547 baby element.

You rincome would probably need to 1/2 before you got anything more than that

[Deleted User]

Thank you very much!

[Deleted User]

Oh and another thing has anybody got an idea what the going rate in the south east is for childcare - 8 and half hours per week.

Cheers.

jellyhead

i know people who use childcare (but i'm in the midlands) and there are different rates according to the hours used. most places will have an hourly rate, but if the child is there for a whole day (7 hours or more) there's a daily rate instead, my sister pays around 7 hours at the hourly rate and for that her children are there for 9.5 hours. she does it once a week.

even if you gave up work completely your other half earns too much for you to get more than the minimum. you won't get the surestart grant or help with childcare. you'll get the child benefit, the family element of £547.50 for the year and also the baby element of the same amount. tax credits are paid monthly and run from april to april so if the child is born in may you'd get their first 11 payments in the first award, then a final payment in the award for the following year. on current figures the child benefit and tax credits combined for one child would be around 1400 each year with an additional £547.50 in the first year.

do either of you have benefits in kind such as company car? if so you have to add the amounts on the erm, P11D is it, on to the salary on your P60 (even though you've already paid tax on those benefits for the purposes of working out tax credits they add it back on again so you effectively pay twice). if this applies to you then you'd have to ask them to consider your new lower salary rather than the old full time one or you might slip over the upper limit.

if you have more children there will be extra child benefit but not any more tax credits, just the baby element for a baby under 1.

[Deleted User]

Thanks Jellyhead.

No we don't have any company cars or things like that. I've been to the Inland Revenue site as recommended above and its seems we would get £384 Child Tax Credit basd on the rough figures I entered in. Those forms do seem a little confusing to me, but I did the best I could.

I had to enter data from 2004-05, which will reflect the period of me working full time now part time. I resubmitted the figures based on me working part time for the following year and we still get the same amount £384, which suprised me, but I guess we earn too much still.

I have estimated child care costs to be approx £100 per week on 1 day. I have know idea how true this is though.

Oh well, i'm sure we will muddle through.

Thanks again

jellyhead

the inland revenue bases figures on what's left of the year, so if you'd filled it in in april (assuming baby is born in april) you'd get a years worth of results, but if you put babys date of birth at november they'll tell you how much you'll get for the rest of that year up to april 06.

although you may not feel rich you are earning more than the average family so you should be able to cope okay. babies don't need to cost a lot, there have been lots of threads about bringing up a baby cheaply. there's a lot of unecessary equipment that you don't need and cheaper choices. kiddicare.com is a good website, i've bought lots of stuff from them. the designs may be last years but that doesn't matter to many people. the general consensus on here is that you can bring up a child on the child benefit and tax credits, it needn't cost any more than that. good luck :-)

[Deleted User]

Thanks Jellyhead, I intend to do it as old style and as cheaply as poss. I realise we earn more than average, but bf has debts he is trying to repay, spends a lot of petrol to work and tries to give some money to his disabled parents every month. If he didn't have these then I could be be a SAHM. Oh well we don't always get everything we want eh?