Need help from TC agents/processors or anyone who knows PY calculations

atomicsheep

"Lizzie" suggested that the £25k threshold rule only applies to ctc ONLY claims here
http://forums.moneysavingexpert.com/showthread.html?t=1597919

so this has now confused me.

afaik my ctc&wtc award is based on PY income.

My income has gone up from april by another £5k/year. As far as I understood i thought that my award for april09-april10 would be based on apr08-apr09 earnings as its within the £25k threshold.

But by what Lizzie suggests, this may not be the case.

I phoned TC to update them on this years earnings but they said they'll send a new award notice out for the new tax year but wern't interested in taking details for the new income for this year.

I hope Lizie is reading so she can set me straight?

System

Your 08/09 award should be based on your 07/08 income and so you have the £25000 disregard.

That is unless you gave TCO a revised reduced estimated income after you did your annual declaration/renewal last year. When you give them a revised reduced estimated income after you have completed your renewal you lose the £25000 disregard which is the reason I always advise overestimating rather than underestimating.

Your provisional payments for 2009/2010 will be based on whatever income TCO currently have until you do your renewal this year. When you tell them your income for 2008/09 they will then revise your award and base it on that income and as long as your 2009/2010 income does not exceed it by more than £25000 you will not have an overpayment at the end of the 2009/2010 year. However again if your circumstances change and you reduce your estimated income then you lose the £25000 disregard.

Hope that makes sense

atomicsheep

that does make sense thanks, and that is how I understood it to be. the way Lizzie was talking I thought you lost the 25k disregard if you had a wtc element

LizzieS_2

"Lizzie" suggested that the £25k threshold rule only applies to ctc ONLY claims here
http://forums.moneysavingexpert.com/showthread.html?t=1597919

so this has now confused me.

The "CTC only" comment was a response to the previous poster who said "is still below the point where they start to make deductions, based on income" It wasn't anything to do with the 25K in the OP, but I didn't expand on the answer as it wasn't relevant to the OP question.

Sorry for the confusion.

I will clarify the point now. There are 3 maximum income levels before income begins to affect tax credits, £6420, £15575 & £50,000. If you earn above £6420 and qualify for both wtc & ctc then your award is means tested on income above that level. If you earn above £15575 and qualify only for ctc then your award is means tested on income over £15575. The 2 figures quoted by the OP were £13K & 14.5K, I read the previous poster to be saying "below £15575 anyway so it doesn't matter", hence the comment of that situation only applies to those entitled to ctc only.

LizzieS_2

Another point about that thread was the 2 figures related to the current tax year. There was nothing in that OP to confirm whether their current award was based on the 13K estimated current earnings or a previous years figure:

1) If it had been based on the previous years earnings, there would have been no overpayment (impossible to fail the 25K disregard when total income is below 25K anyway).
2) If the previous years earnings were say £30K, then this years award would have been paid at a lower level. In this instance they could have asked for it to be done on 13K early this tax year. In this instance there would have been an overpayment, as their actual earnings were higher than their own estimate.

atomicsheep

i see, i misread.
However you have got me thinking along some other lines now. you mention about the 3 earnings levels.
my earnings for 08-09were 15360
my earnings for 09-10 will be 19650
so i'll be crossing this threshold. Wht will it mean for me then?
we currently get £50/week ctc and £24 wtc

LizzieS_2

atomicsheep wrote: »

i see, i misread.
However you have got me thinking along some other lines now. you mention about the 3 earnings levels.
my earnings for 08-09were 15360
my earnings for 09-10 will be 19650
so i'll be crossing this threshold. Wht will it mean for me then?
we currently get £50/week ctc and £24 wtc

Due to the income figures & you receiving both ctc & wtc, only the £15575 earnings threshold will apply for you.