Help, are tax credits being dropped for anybody over £25,000 in 2012

zagfles

Blue22 wrote: »

Hi Zagfles

I hate to disagree with you because you obviously know tax credits inside out, are an excellent poster and can explain things far better than I can.

But in the scenario I was suggesting, with the OP working 2 days a week, paying 2/5 of her current childcare costs and earning
£7500/annum, my quick estimation is the family would be approximately
£700 a year better off. I'll do the figures when I get to a proper computer rather than a phone.

Btw I think the system is very wrong that it works like that and also very wrong that it is so complex that few people understand it.

This couple are doing what they believe to be the right thing and the best thing for their family. Both working full time and making scarifies with regards their time with their children but as I pointed out the only ones benefiting are the childminder and the treasury.

OK. My PP was based on the difference between benjaminsmam not working at all, and her working as she does now. They'd be about £5470 better off her working as now compared to not working (if you think this is wrong - which it could be - please check my figures and let me know how it's wrong).

Earning 7500 and paying 4000 childminder (compared to not working):

Tax credits would go down 7500*0.41 - 4000*0.7 = 275.

Take home on 7500 about 7470 (little NI).

Net gain 7470-4000-275 = 3195.

So she is better off working full time, but not much!

I see what you're doing with the marginal rates, but remember she earns about twice what she's paying the childminder, so every extra £1 earned (once over the allowance) would cost about 15p net in childminder fees (30% of 50p as 70% paid by tax credits), and lose 73p in tax/NI/tax credits withdrawal. Making the gain about 12p!

Maybe hardly worth it - but she doesn't actually lose by working more hours.

princess-angelica

hiya. i am totally confused about my tax credit situation at the moment so please help if you can. My husband currently earns £52,000 we have four children one under the age of one. I do not work. are we going to loose our tax credits in april 2011 as far as i am aware we are. we currently receive £70 a month.

Thank you this is my first post so bear with me

ohdamnit

princess-angelica wrote: »

hiya. i am totally confused about my tax credit situation at the moment so please help if you can. My husband currently earns £52,000 we have four children one under the age of one. I do not work. are we going to loose our tax credits in april 2011 as far as i am aware we are. we currently receive £70 a month.

Thank you this is my first post so bear with me

Trip trap trip trap???

zagfles

ohdamnit wrote: »

Trip trap trip trap???

I thought that but the current figure is accurate.

4 kids under 1 is impressive! (edit - oops misread the PP - she only has one under 1)

zagfles

princess-angelica wrote: »

hiya. i am totally confused about my tax credit situation at the moment so please help if you can. My husband currently earns £52,000 we have four children one under the age of one. I do not work. are we going to loose our tax credits in april 2011 as far as i am aware we are. we currently receive £70 a month.

Thank you this is my first post so bear with me

Yes, fraid you are right.

zagfles

skcollobcat10 wrote: »

I can't believe that somebody on £25,000 per year gets tax credits of £100 per week = £5,000 per year.

A question I would like to ask others with 3 children on that wage.

If tax credits had never been started up in the first place, would you still have gone ahead and had 3 children?

Why, do you think £25k to support 5 people is a high income? In most other civilised countries such a family would pay no tax or very little as they'd be able to use 5 allowances against the income. Here we tax independantly so take too much tax off families and then give it back in tax credits.

princess-angelica

forgive me i thought this site was made to give people advice not sarcasm if you read my post properly it says i have four children of which one of them is under the age of one. And yes i would have had four children without tax credits.

zagfles

princess-angelica wrote: »

forgive me i thought this site was made to give people advice not sarcasm if you read my post properly it says i have four children of which one of them is under the age of one. And yes i would have had four children without tax credits.

I apologise for misreading your post (I have editted that post), and I don't think you are a troll.

I did answer your question - you are right in that you will lose your tax credits in April (assuming no disabilites etc).

princess-angelica

Thank you for your help. i thought i would but like somebody said in one of the earlier replies there is so much conflicting information.

thank you again

eyeinthesky

Sorry, but I find it obscene that people with an income of £50k, £40k, or even £25k can still get state handouts. I raised my family and bought my home with nothing more than family allowance. I still don't have an income of £25k.