Leaving work to go back college

antwebb

Hi I've got an unneccessarily complicated situation that I'm hoping someone can give me some advice on!

I am 23 years old working 45 hours, living with my partner, 24, who currently works 20-30 hours, our 15 month old daughter, and also my disabled mother. As a family we currently receive next to no financial support (i.e. £20pw child beneift & £10.38pw child tax credit) although my partner gets £53.10pw carers allowance for my mother. We have no childcare cost presently as my partner works only evenings so my mum can cope with looking after our daughter as she is not awake for long after my partner leaves. We are also very lucky in that as my mother is classified as "having need" to have me live with her her LHA rate is the full 3 bed rate to allow for that, with no non-dependant deductions, and full council tax relief - leaving us only having to make up a £250pm gap in the rent.

At the moment (and for the last couple of years) I earn between £415 and £814 per week before tax (performance related, averaged out if i recall correctly £29k last p60) my partner was on maternity allowance for most of the last tax year but since december has earned average about £150pw (i think her last p60 was a little over £4k but i may be wrong)

So.......

This september I begin an Access to HE course at college, less than 20 hours, but I will have to give up my current job.
As this is only a level 3 qualification and not degree level I have no idea what student / adult study financial help is available (I will be beginning a masters degree course in september 2010). I'm assuming my partner will have to increase her work, and we will have to begin using registered childcare 3-5 days a week which we will presumably be able able to claim help for, and I will have to find a part time job. Realistically though we're not going to get anything like the income we have now, and from what I can tell tax credits wise we'll basically be BETTER OFF if we aim to earn not much more than £300pw between us, is that right? And its best if my part of that is just over 16 hours and my partners is just over 30?

Also because of the LHA situation with my mum, even if we find ourselves qualifying for housing benefit i don't think we'd be able to claim it against the £250pm we do pay without rejigging the contract so thats probably going to become a burden instead of a bonus.

The problem is the tax credit calculators are all well and good but they can't show me the income/working hours to tax credit sliding scale or if i want to pose a bunch of hypothetical situations and find out what we'd be best to actually aim for. I'm about to have a pretty tough 6 years study so I'd be stupid to work more than I absolutely have to during that time!

Any comments appreciated, sorry its a massive ramble!

bestpud

Your wife cannot claim CA if she earns more than £90somet per week, as far as I am aware...? I think you need to check that as she may not have been entitled to it from December.

Also, why is she claiming CA for looking after your mum and then leaving your mum to look after your child?

But, as for studying:

If your wife works more than 16 hours, you can claim wtc and ctc, but won't get help with childcare through tax credits unless you are both working more than 16 hours.

I don't think you will get help with childcare while on the access course either.

You won't get student funding for an MA - are you doing an undergrad degree first? If you don't already have a level 3 qualification, you shouldn't pay tuition fees for the access course, but if you have a degree already, are you sure you need to do the access course?

As an undergrad (if first degree), you could apply for student finance and may be better off getting the childcare grant through them, but you won't get help if your OH is not working. If your OH earns less than around £20k (it's higher than that but I'm not sure of the exact figures), you will receive the full support package.

Your living costs are actually very low, so you can get lots of help with reducing your outgoings on here and that should help a lot.

Have you any savings?

Sorry if I'm not helping much but I'm a bit confused by some of your post, i.e. the CA and your course(s).

antwebb

Hi Bestpud, thanks very much for your reply

Sorry for being confusing, it was about 4am after a long day at work!

I had better clarify some points then:

The access course will be my first level 3, and indeed i have only had to pay £30 to enrol on this.

By "Masters" I meant the whole course, a 5 year course of degree + working sandwich year + masters, the course is run as either Beng or Meng so the masters is sort of inclusive, if that explains my ambiguity any!

I think I overstated my partners current income somewhat - got my paragraphs mixed! Last april when all the rubbish came through we reviewed and were definately ok for CA in the short term, obviously with planning to increase her hours does anyone know if I will be able to claim CA instead of my partner if my income is low enough and only working ~17 hours even though I will also be studying for as many hours again? Do hours studying make a difference or only working?

The CA claim stands as we cook / feed / clean / shop for / dress / help bathe / mentally stabilise / etc etc for my mum. When my partner leaves for work, my mum will feed and play with our daughter (after we have made extra effort to wear her out during the day) for maybe an hour and then put her to bed at her usual bed time - this quality time spent with her granddaughter if nothing else has had an ENORMOUS positive impact on my mums delicate mental state, as well as indeed being very convenient for us as at the moment as it saves us looking for childcare at such a young age. However she will not be able to help with any daytimes as her physical condition leaves her exhausted after a much shorter time with the rather-less-tired-little'un - hence the sudden jump to 3-5 days childcare, depending on how many of mine and my partners hours coincide.

Regarding the numbers of hours I am expecting us to work, I had imagined that we will be maintaining my hours at just above 16 alongside my course and my partners at just above 30, purely because they seem to be the 2 thresholds that we should aim for to maximise the credits we are entitled to? We are both capable and willing to work either more or less but as I say the goal is to maximise income (relevantly the TOTAL of earned income PLUS tax credit MINUS the gap between the increased childcare costs and what we may or may not be able to claim to cover them!) vs the sacrifice of less time available to spend studying and with family

No savings at the moment, still paying off some debts from a previous life, long story. I do have access in emergency to £4000 in overdrafts and a £1500 credit card who would probably increase my limit if I asked, but that is obviously not the course I hope to pursue!!

I am already entirely obsessive at controlling living costs, all spreadsheeted up down to the penny I have calculated what we *can* survive on, but obviously that is a rather different lifestyle to what we can presently afford - again this is not really about a need to economise, just to maximise our entitlements to get the absolute best use of the time we have over the next 6 years. Once done, I will merrily set to work adjusting our outgoings to match, rather than the other way around.

Student finance-wise, obviously the bulk of what is available will be maintenance grant, bursary, loan for the 4 years spent at university as undergrad, however with all this "back to training" nonsense the government have been pushing, I wasn't sure if there was some sort of grant / loan that may be available to me at this stage as someone who is giving up a reasonably paid job in order to return to education at level 3 in order to go on to degree level? I have read that student finance should make very little difference to tax credit entitlements as they are generally based on "earned income" only, is this true?

Thanks again for reading, I seem to have filled yet another full screen of text! All good practice for writing assignments though eh

bestpud

Here's a link for CA, and it basically says you won't be allowed to claim it as a full time student, especially if you are working as well:

http://www.direct.gov.uk/en/CaringForSomeone/MoneyMatters/CarersAllowance/DG_10012525

If you can manage while doing your access course then you can start applying for student finance once at uni.

At that point, you can apply for the childcare grant if your OH is working and get all the grants/loans etc if your OH isn't on a high wage. They can have some hours free once they are three as well.

I'm assuming you've looked through all this:

http://www.direct.gov.uk/en/EducationAndLearning/UniversityAndHigherEducation/StudentFinance/Applyingforthefirsttime/DG_171523

I don't think you will receive funding for your Masters year though, although I may be wrong.

I also don't think you will get any help while doing the access course, so it may be a case of getting through this year before you can breathe again! The access course is a bit full on though, just to warn you, and you may find it a struggle with children and work - you will definitely want to be organised from the start!

antwebb

I'm pretty sure that the course is going to be just under 20 hours attended, so in theory CA could still be a possibilty, but I shall assume it is not.

With no other education based help for the first year also, that leaves purely earned income and tax credits.

So this simplifies my question really (hooray!)

Is anyone able to confirm how the thresholds and sliding scale (roughly) would affect me for working and child tax credits?
Would I be right in saying that the "best" position to be in is a joint income circa £300pw, with my hours just over 16 and my partners hours just over 30?
Will working slight more or slightly less gain or lose us income? Is there anything we will or won't qualify for?
Or is there a completely different way to work it that might be better for us?

bestpud

I think, if you are going to work alongside the course, you will defintiely be over the threshold for CA, so you are right to count that out.

www.entitledto.com is good for calculating benefits - just have a play around with figures and input it as though it is now for the best estimate, although your earnings so far this year may reduce your tax credit entitlement until next April.

In fact, you need to be careful if you reduce your income and let tax credits increase your award before April, as you can easily fall into an overpayment.

If you do that, be careful to overestimate your income and tell them straight away if you look set to earn more.

antwebb

Thanks for the good advice, last thing we need is to end up owing money back!

I had a look on entitledto before I made the original post and admittedly it was nearly 4am but I got rather confused and it ended up telling me we'd qualify for about £9k tax credits and £8k housing benefit or something lol
Will have to have a proper play around later I guess!

I know they keep pointing out that the calculations are "far too complicated to work it out yourself" but seriously, is there no basic chart with hours / £ on one axis and entitlements on the other?! Seems mad that there isn't?
I found one in an old PDF for a tax credits system review in 2002 and as suspected that sort of peaked at maximum IS for next to nothing earned and maximum tax credits at about the £250 earned pw mark at the time - I still can't get my head around a system that seems to pay more for earning more up to a "perfect wage" point before rapidly falling off again

bestpud

Here's a few figures for you, but it is difficult to work out witout anything to go on. How much do you think you will be paying for childcare?

These are all rounded down to the nearest pound and assume you are no longer claiming CA:

If you were earning:

£20k per annum - you £5k and her £15k = £38 per week CTC
£16k per annum - you £4k and her £12k = £15 per week WTC + £53 per week CTC
£25 per annum - you £5k and her £20k = £10.50 per week CTC

If earning as above but paying £100 per week childcare:

£16k per annum = £95 per week WTC + £53 per week CTC
£20k per annum = £27 per week WTC + £53 per week CTC
£25k per annum = £43 per week CTC

bestpud

Have a look at this for a fairly simple explanation of how it works:

http://www.macintyrehudson.co.uk/content/padvisor_home/ctc_wtc.html

antwebb

thats fantastic, thank you very much for all your help

elfen

You'd get WTC for your partner working and you being a student. Extra for the little one and for your mum, as she is seen as a dependant and you'd get the disabled additional onto it (I did look into this and working full-time on DLA)

If it's your first full level 3 qualification the college may pay for it because of a govt scheme to get people educated to a good standard. You may get ALG for you being at college (you may not) but you should get HB and CTB cos of your low income. You'll also get a deduction for you being a student (if it's F/T) I think Access courses usually come in under 15 so people can get IS/JSA so you may get IS if it's less than 16 (also cos of your disabled mum and the baba you need more to live on so may get some)