Overpayment of tax credits and benefits?

daddio

Several of us from where I work were informed today that the structure of pay we were on was at the wrong hourly rate compared to equal staff members which comes out at an extra £0.60p per hour we should be recieving.
We have been told that the company will reimburse us the money we have been underpaid and that it goes back for the last 6 years.
Now this is fantastic news but I am worried that as i am in reciept of working and family tax credits as well as housing and counsil tax benefit does that mean that they will be wanting money back from me as they will class it as an overpayment of tax credits and benefits for the last 6 years?.

alfiesmum

As long as it is less than a £25,000 increase on your predicted earnings for this year (your actual earnings for last year), then you'll be allowed to keep the tax credits as they were paid to you.

Unless your tax credits were worked out on a figure given by yourself, that was LESS than your actual earnings for the previous year. That cancels out your right to the £25,000 disregard IIRC.

Butterfly73

alfiesmum wrote: »

As long as it is less than a £25,000 increase on your predicted earnings for this year (your actual earnings for last year), then you'll be allowed to keep the tax credits as they were paid to you.

Unless your tax credits were worked out on a figure given by yourself, that was LESS than your actual earnings for the previous year. That cancels out your right to the £25,000 disregard IIRC.

Hi ya !!!

This very thing happened to my husband. He is due £4000 roughly pay back.

He earns £6500
The rest is made up of family and working tax credit ... This is under £25,000 -
The reason I qouted is because being a thicko and not quite up to the know - Please can you put in easy to understand language for me ... Lol .
I am so ignorant sorry - but thank you for your time and advice :jxx

alfiesmum

Every year you give the tax credits the figure you earned last year. That's what they use to work out your tax credit payments for the following tax year. As long as that amount earned does not go up by more than £25,000, then your tax credits award will remain unchanged.

If you gave the tax credits an amount LOWER than your actual earnings were last year (if for example you genuinely thought you'd be earning a lot less), you loose the right to that £25,000 disregard. And anything earned over the figure you gave will be used to recalculate your tax credit award. And anything overpaid to you in tax credits as a result will have to be paid back. But if you used your p60 amounts for last year, and didn't change them then the above applies.

Hope that helps.

Butterfly73

alfiesmum wrote: »

Every year you give the tax credits the figure you earned last year. That's what they use to work out your tax credit payments for the following tax year. As long as that amount earned does not go up by more than £25,000, then your tax credits award will remain unchanged.

If you gave the tax credits an amount LOWER than your actual earnings were last year (if for example you genuinely thought you'd be earning a lot less), you loose the right to that £25,000 disregard. And anything earned over the figure you gave will be used to recalculate your tax credit award. And anything overpaid to you in tax credits as a result will have to be paid back. But if you used your p60 amounts for last year, and didn't change them then the above applies.

Hope that helps.

Okay Just to clarify - I would hug you, you know if you were here in person... Sorry just I am dizzy ..

Right sooo If I told Tax Credits that we would be on less than we are getting this year then I would lose the right to the money....

But if the tax credits are the same as last year from you p60 (rather than guessing estimate) and not less - I CAN keep the money !!!:T

What about housing benefit and council tax to they have any rights to the money? Look at meeee LOL - This never happens to us ... So excited I could burst .....

Oh Thank you so very much x

MrsBartolozzi

You might hit a problem regarding current/future council tax benefit and housing benefit as the lump sum you will get could put your savings above the £6k limit. (not sure if it would affect previous year's claims and any overpayments though, sorry)

Butterfly73

MrsBartolozzi wrote: »

You might hit a problem regarding current/future council tax benefit and housing benefit as the lump sum you will get could put your savings above the £6k limit. (not sure if it would affect previous year's claims and any overpayments though, sorry)

Saving ?! Lol - all gone and spent !

But thank you for letting me know - Looks Like I can pay off some more debts !!!!:T:eek::T:rotfl:

Butterfly73

Just wanted to say sorry daddio for pinching your post !

And thank you to you guys for helping me Very much appreciated xxx