WTC and student loan repayments

Last year I had a baby. I receive the childcare element of Working Tax Credit, which covers 70% of my daughter's nursery costs. I am still in the same job as before my pregancy, so my salary has not changed over this period. Before I had my child, I earned below the repayment threshold for my student loans. Since I have had my baby, the Student Loan Company views this childcare element of my working tax credit as additional income (even although every penny is spent before even received on childcare, and I still have to find the additional 30% of childcare costs from my pre-pregancy level salary, previously deemed below the repayment threshold.)

1. Has anyone else experienced this and attempted to challenge it?
2. Surely this cannot be ethically right?

I fully intend to repay my student loans but as a single working mum find that childcare is my priority right now, but the SLC's stance on my WTC 'income' means I struggle sometimes to simply purchase food for myself after everything else is take care of i.e. break even.

Does anyone have any advice re the SLC?

Replies

  • meanbeanmeanbean Forumite
    170 Posts
    Addendum

    Sorry, reread this and it doesn't make full sense. what I forgot to say was that my WTC means I am now over the student loans threshold, and have had to commence repayment of my loans. So from my old 'below-threshold salary' I now have to find money for childcare and also repay my loan!! doubly out of pocket just when I need it the most. argh.
  • CISCIS Forumite
    12.2K Posts
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    I though that any tax credits didn't count ?, The leaflet I was reading says they ignore tax credits when calculating repayments .

    Page 7, left hand column and right hand column
    http://www.student-support-saas.gov.uk/_forms/student_loans_terms_conditions_0506.pdf
    I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.
  • meanbeanmeanbean Forumite
    170 Posts
    thank you for this. I did not know. I will reapply for a deferral. at the time I wrote them a letter explaining that the income was tax credits and they did not tell me they were exempt. thanks again
  • meanbeanmeanbean Forumite
    170 Posts
    SLC say tax credits are taken into account as income. what is the source of the above document? there's no mention of tax credits on their website
  • CISCIS Forumite
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    According to the leaflet the rules for re-payments where contained within the the Education (Student Loans)(Repayment) Regulations 2000 and any ammendments

    I had a look at the regulations and it states that income is ignored except:

    (g) any child tax credit to which he is entitled under Part I of the Tax Credits Act 2002.

    It seems that the DFE's is wrong in its booklets and the SLC is right
    I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.
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