Can someone explain the 39% rule for WTC ?

ladybelle

For the past 3 years I have been under the threshold to get maximum WTC which I totally need, but I think I am going to be just over it this year - by literally maybe £50.
I dont understand how your award gets reduced by 39% if you earn more than the threshold. Does that mean my whole award is lowered by that much ? which makes a difference of £120 a month !!!
And the only reason I am over is because my employer has merged and they have changed our pay schedule so instead of me getting just two more pays which would have kept me under, we now will get 2 months pay plus another 2 weeks to change our pay date but under the old system would have been under so can someone please explain how they actually work out your award when you are over the limit.
And one more thing - my current award notice says they will use a certain figure to work out my 2010 award - but looking online here now, the threshold is lower than that so which one would they be using ?

karenx

In simple terms- if you over the limit you dont get WTC.
Whats your wage and situation?

chrisbur

ladybelle wrote: »

For the past 3 years I have been under the threshold to get maximum WTC which I totally need, but I think I am going to be just over it this year - by literally maybe £50.
I dont understand how your award gets reduced by 39% if you earn more than the threshold. Does that mean my whole award is lowered by that much ? which makes a difference of £120 a month !!!
And the only reason I am over is because my employer has merged and they have changed our pay schedule so instead of me getting just two more pays which would have kept me under, we now will get 2 months pay plus another 2 weeks to change our pay date but under the old system would have been under so can someone please explain how they actually work out your award when you are over the limit.
And one more thing - my current award notice says they will use a certain figure to work out my 2010 award - but looking online here now, the threshold is lower than that so which one would they be using ?

If your earnings are over the threshold to get the maximum working tax credit then for each pound over this that you earn your tax credit is reduced by 39 pence. So if you are £50 over for the year you will get a reduction of £19.50 for the year or £1.50 off each four-weekly payment.

leemack

your 2009-2010 award is based on your income 2008-2009, so your tax credits for this year are set as long as you don't earn £25,000 more.

Your 2010 award will be based on your earnings for 2009-2010. The threshold for wtc is due to be the same as it was for this tax year.