Deferment and Child Benefit/Tax Credits

JD123_2

I am a Mum to a 13 month old and recently became a single parent. I have just got in the usual deferment forms from the Student Loan company and the amount is £2061 - I earn 1888 gross a month.

BUT I get child tax credits and the childcare element of working tax credits and child benefit. SO this takes me over the 2061 a month.

Can someone please explain why I should use tax credits and child benefit to pay my student loan back - as basically that is what I will be doing.

I am working full time so that I can pay the rent, yes I get tax credits but these go to help pay my childcare. If I have to start paying my student loan back I have no idea how I am going to pay the bills.

I am just about managing now - and as I understood it these benefits are means tested and then you get the top ups to bring you to a level to make it worth you working.

I am already stuck in the trap where if I earnt less I would actually be better off as if I worked less hours and earned less I would get the actually working tax credits and then all the benefits that come with them.

If this just a case of tough luck?

welf_man

CB / CTC / WTC are not taken into account - it's only earned income and things like interest on investments and rental income that count.

Mel.

JD123_2

Oh that is very confusing as it lists all the other benefits(disability, pensions etc) and states they are not included but it doesn't say that about tax credits and child benefit.

welf_man

Hmm - just reread your first post and realised this is a Fixed Term loan. TBH, I'm not sure if the income definition is the same for those - have you checked with SLC? The Money Advisers at your old university would be able to help too.

Sorry if I got this wrong!

Mel.

traveller

Hi , tax credits ARE taken into account.I've just spoken to them, as I too am In your shoes.

Fire_Fox

I believe the system works on taxable income - some benefits are taxable and others are not.