Emergency Budget: tax credit cuts for millions

WorriedMart

Thats how I take it anyway, maybe someone who can clarify will pop in.

Old:
Second income threshold: £50,000
Second withdrawal rate: 6.67%

New:
Second income threshold: £40,000
Second withdrawal rate: 41%

Motherhubbard_2

Sparklyfairy wrote: »

Where did you see this? I can't imagine it's a blanket rate, but who knows!

The Government will increase both withdrawal rates to 41%

As per HMRC website!!

Looks like that has been skipped over in the news!

taurusgb

Changes to Child Tax Credit and Working Tax Credit

Budget 2010 announced several changes to Child and Working Tax Credits, including:

• raising the second withdrawal rate (the amount taken off your tax credit entitlements depending on your income) to 41 per cent from 6.67 per cent
• lowering the amount of your income not taken into account from £25,000 to £10,000, and then £5,000
• increasing the rate at which tax credit awards are reduced
• removing the one-off payment for new workers over 50 from April 2012
• no Child Tax Credit from April 2011 for families earning more than £40,000 per year
• aligning the income levels (thresholds) for the child and family elements
• removing the baby element from April 2011
• increasing the child element by £150 above inflation in April 2011 and £60 above inflation in April 2012

taken from here (click on the benefits and tax credits link) :-
http://www.direct.gov.uk/en/Nl1/Newsroom/Budget/Budget2010/DG_188499

lovetowinacar

Motherhubbard wrote: »

The Government will increase both withdrawal rates to 41%

As per HMRC website!!

Looks like that has been skipped over in the news!

Can someone explain how the withdrawal rates work with income examples please?

taurusgb

lovetowinacar wrote: »

Can someone explain how the withdrawal rates work with income examples please?

does this help? (have to say I havent read it through just did a search)

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/TaxCreditsandChildBenefit/TaxCredits/Paymentsandentitlement/entitlement/DG_186815

or this
http://www.which.co.uk/advice/tax-credits/how-your-tax-credits-award-is-worked-out/index.jsp

Deepmistrust

I know of one scrounging family that won't lose much sleep at simply having their payments "frozen":rotfl:

http://news.bbc.co.uk/1/hi/uk/10379748.stm

WorriedMart

The second withdrawal is the Family part right?

If your income is more than £16,190, the child element will be reduced (FIRST). But your income can be up to £50,000 before the family element is reduced. (SECOND).. now changed to £40,000

As long as your income is under 40k, you will not loose any of the second (Family), if its over you will loose 41% of the allowance instead of 6.67%.

I think?... So confusing.

babymoo

Penny-Pincher!! wrote: »

All DLA claimants new and exisiting from 2013 will have medicals but shorter form filling.

All sounds fair so far.

PP
xx

As I am on DLA myself I totally agree with this it is about time that only the people who need to be on it are on it. I know so many people who should be entitled to it that aren't and know of too many people who do get it that really shouldn't. If you are genuinely ill then it will make no difference to you whatsoever. If you are pulling a fast 1 then i'd start to worry. The shorter form filling will be very welcome aswell.

Must admit I agree to everything that I have heard about so far.

Indie_Kid

debrag wrote: »

I'm just hoping that these medicals mean more people will be shown to be able to work

DLA has nothing to do with working.

sulkisu

bat_women wrote: »

:(:(child benefit frozen its a bit harse

It didn't go far enough. It should have been means-tested and/or restricted to the first two children.