CTC calculation details

Strapped

Hi, apologies if this has been asked before, but DAK the precise details of the CTC calculations?

I know that you add the "elements" together, and then there is a deduction for each £ over a certain income threshold, but DAK what the threshold is, and what the deduction "factor" is (ie deduction per £ of income).

Thanks. I did look to see if this had already been posted but couldn't find.

No links to online calculators / entitledto / etc please, as they give different answers and I want to know the actual calculation.

Background is: DS just awarded higher rate care DLA - I know that we won't qualify for anything except the family element of CTC this year because I worked for some of it, but I think that next year, on just hubby's wages we will be around the threshold & may - or may not - be entitled to extra CTC. In the meantime, I was surprised to find that a largish sum had been deposited into my bank account today by the tax credits people (not even the normal day) and I think we are heading for the nightmare of overpayments again! Will ring them tomorrow of course but last time this happened to us the conversation went something like this:

Me (after a very brief period of unemployment): "We expect household income this year now to be £x...so I think you've overpaid us. Can you correct it?"
Man at CTC: "Yes, you know that, and I know that, but we're having trouble getting the computer to know that, so we can't stop the payments until we can get it to update your statement"...:rolleyes:
Me: "Can I just repay it as they arrive?"
Man at CTC: "The state this place is in at the moment, I'd just hang on to it, as we couldn't guarantee a receipt!"
...fast forward three years before it was finally sorted out :eek:

Golden_Anemone

http://www.rightsnet.org.uk/pdfs/Tax%20Credits%20Calculator.doc

Don't know if the elements on the sheet are the current ones but you can check this on the HmRC site.

Would the "largish sum" be because they are now paying an extra amount for your DS as the DLA award means he is a disabled child?

Strapped

Yes, they have obviously been notified that he is getting higher rate DLA and so the disabled child and severely disabled child elements have been brought into the calculation, but I think that this year's household income is too high for this to have any effect (hence my surprise at the extra ££££s). I just don't want to spend anything we may have to pay back! I rang them this am and made sure that they had our estimated final household income for this year but they couldn't tell me there & then what the award should be - I will have to wait for an award notice to come out, "possibly sometime next week". (Disappointing). My details were out of date - my own fault I know.

tamalyn

i have just had a huge payment too, and my next months payment is even bigger! my circumstances have changed since my hubby moved out and it has taken them over 6 weeks to send me award notice out, which is a pain as i need it to claim free school dinners.
I told them i have been overpaid as its way too high, but they said its fine! so i will keep it safe and not spend. Its a disgrace!
they seem to be backlogged so i am definate that they are making msitakes. They asked for my income again when i rang yesterday, but i only made the claim 6 weeks ago,

LizzieS_2

Current rates here

http://www.hmrc.gov.uk/rates/taxcredits.htm

There is a reduction for all gross income in excess of £15575. For income up to £50K the reduction is 39% but the net payment cannot fall below £545pa.

Strapped

Thanks Lizzie, that's exactly what I was after. I think that works out then that if household income is more than £35,395 for 08/09 then we won't get more than the £545 family element.

ETA: I see the link has 09/10 rates too - I think we might get a tiny bit extra next year, yay!

proview

Strapped wrote: »

Thanks Lizzie, that's exactly what I was after. I think that works out then that if household income is more than £35,395 for 08/09 then we won't get more than the £545 family element.

ETA: I see the link has 09/10 rates too - I think we might get a tiny bit extra next year, yay!

Where is the link for 2009/10 rates ?

LizzieS_2

proview wrote: »

Where is the link for 2009/10 rates ?

On the same link I put up earlier. There's 2 columns, one for this tax year and another for next.

mitchaa

Strapped wrote: »

Thanks Lizzie, that's exactly what I was after. I think that works out then that if household income is more than £35,395 for 08/09 then we won't get more than the £545 family element.

ETA: I see the link has 09/10 rates too - I think we might get a tiny bit extra next year, yay!

It depends on the number of children you have as to where you fit in. As far as im aware...

1 child is set at around £22500 and for every child thereafter an additional £5350 is added on top.

edited....In fact....

http://forums.moneysavingexpert.com/showthread.html?t=1047921

Jessicas post at the bottom can be proved wrong by entering the income details into the HMRC do i qualify website. As far as im aware the figures are correct 08/09

Strapped

mitchaa wrote: »

It depends on the number of children you have as to where you fit in. As far as im aware...

1 child is set at around £22500 and for every child thereafter an additional £5350 is added on top.

edited....In fact....

http://forums.moneysavingexpert.com/showthread.html?t=1047921

Jessicas post at the bottom can be proved wrong by entering the income details into the HMRC do i qualify website. As far as im aware the figures are correct 08/09

I have two children, one of whom (in CTC terms) is severely disabled.

I looked at your other thread but I think it's incorrect, sorry. Lizzie's link is to the official HMRC tables. The threshold for 08/09 is £15,575 (CTC only).

Calc:

Family + child x2 + disabled child + severely disabled child = £8,275 max award.

£8,275 - £545 min payment = £7,730

£7,730 / 39% = £19,821

£19,821 + £15,575 = £35,396


So, for example, on a household income of £30k:

£30,000 - £15,575 = £14,425

Amount to deduct from max award = £14,425 * 39% = £5,625.75

CTC award = max award £8,275 - deduction £5,625.75 = £2,649.25

and on an income of £40k:

CTC award = max award £8,275 - deduction £9,525.75 = -£1,250.75 therefore the min payment of £545 applies

Or am I missing something here?

I don't trust online calculators btw

Strapped

The plot thickens...

I now think that maybe we are entitled to this extra money. I thought that we weren't, because I worked for a number of months this year. BUT - apparently the award is still based on LAST year's income (when I wasn't working) even though our actual income this year is higher (so long as our actual income this year is not more than £25k higher than last year - which it isn't).

Ouch, my head hurts.

Hopefully this will all be confirmed in black and white at some point...