Net income calculation.

Legacy_user

I'm trying to clarify this for a friend who is an NRPP.

Does the CSA take an NRP and NRPP's tax credits award into consideration when calculating Net income?

If so is it the total award or only the NRP's half?

kelloggs36

Child tax credits are always taken into account.

Working tax credits are either taken in full if NRP is main earner, half if the NRP and NRPP earn the same, and none if the NRPP earns the most.

System

Thanks Kelloggs36.

My friend, who was previously widowed, has 2 children of her own and both she and her new partner, the NRP, work and so get allowed for childcare costs in their tax credit claim for her children who live with them. They do not have a child of their own. So she just wants to clarify if that part of their tax credits are also included. She understands the deduction made for 2 children living in their household but is querying the childcare costs being taken into consideration.

BTW her partner would be the main earner and their annual incomes would be about £16800 and £15000 each.

Thanks again

kelloggs36

Not sure that they can differentiate between the working tax credits and childcare tax credits.

fivalentine

hild tax credit is treated the same way as working tax credit.

kelloggs36

No it isn't - child tax credit is ALWAYS deemed to be income of the NRP regardless of who is the parent. Working tax credits are deemed to belong to the higher earner, or is split 50/50 if they earn the same.

shell_542

kelloggs36 wrote: »

Not sure that they can differentiate between the working tax credits and childcare tax credits.

Would be worth your friend ringing them and asking for clarification. I was under the impression that they are all included in the assessment (as Kelloggs described).

fivalentine

sorry i meant child care tax credit is treated the same as working tax credit

kelloggs36

yes it is as far as I understand - unless anhything has changed recently.

System

Thanks for the clarification, I've passed it on.
IMHO it does seem unfair that the childcare cost element is deemed the NRP's when my friend (NRPP) has always received them since before the 2 of them got together. Not a lot they can do about that though I suppose.

shell_542

There's nothing anyone can do at the moment. Thems the rules It does seem unfair that a family get money to pay for child care costs to make it more affordable to work, and then have to give some of that money away. I hope it doesn't affect them too badly, financially wise.