Query about whether I should take on extra working hours.

vyvyan_2

A bit of clear thinking advice needed here because I’m getting brain-ache trying to work out what’s best.

I’m currently working part time 22 hours per week @ £6.16 ph.

I get taxed a little bit and National Insurance too gets deducted. I get Child and Working Tax Credits. I am a single parent and my youngest child aged 17 still lives at home. I also claim Housing Benefit for my rent which covers about half of my rent and the rest is met myself.

My employer has offered me a chance to extend my contract to 37 hours per week at the same rate, effectively making me full-time. I can do the job standing on my head as I’ve been there 2 years and this is to replace another part timer who is leaving at the end of the month.

If I take this extra work, I will get taxed on the extra and National Insurance will go up too. I used the Tax Credits calculator to work out my new ‘award’ which will apply from their next review and I guess, they will deduct the overpayment from this year from November onwards, when I start my extended hours. The Tax credits go down massively.

Also my Housing Benefit will go down massively as I’ll be paying more of my rent myself, according to my Local Authority’s Housing benefit Calculator.

Unless I’ve made a huge error in my sums, as far as I can see, I’ll be worse off by £134.06 per month!!! Can this be right? In what order do these things affect each other? Has anyone any clues as how I can make this clearer? I don’t see any reason why I shouldn’t work full-time but not if I’ll be significantly worse off by doing so.

Sorry for the long ramble.

Eager_Elephant

Hi,

When you are a single parent it is entirely possible that you would be worse off.

I take it your 17yo is in full time education - if so when does s/he finish?

If it is soon, it may be worth taking as you would lose the CTC & WTC and obviously Child Benefit and then the increase in wages would come in handy.

EE

vyvyan_2

Hi - Thanks eager-elephant for your interesting reply.

My son is in full-time education half way through 6th form and doing his A levels next summer. After that he hopes to go to university if he does well, or to a tech college to do a degree.

Either way , after next summer all the child stuff will finish. He'll be 18 in February.

Are you saying that maybe a short term loss might pay off in the long term for work?

I had thought of that - but I was getting tangled up in knots and could only work things out on my current money.

Eager_Elephant

If you took the job now when your son leaves 6th form you should be entitled to some (but probably not much WTC) as you would be working over 30 hours.

The new rules for Tax Credits are that you should not get an overpayment if your income increases by less than £25,000 so I reason that you will continue to get the same amount of benefit until April and then it will drop which means that you will have about 4 months of less money before most of the benefit drops away.

Ring Tax Credits and ask them to do a hypothetical calculation if you took the job now.

EE

vyvyan_2

Thanks I will do that and maybe see if I can get an appointment with the Housing Benefit office to do the same.

amibovered?

Hi

Try typing your existing and new details into entitled.com website. I did that to help me decide a similar question.
Hope that helps and good luck

vyvyan_2

Thanks amibovered, I'll try that too! I want to make the right decision here.