Living with Mum and tax credits

greenman1234

Hi there.I am new to these boards so bear with me.My wife and I live with my disabled mum.She owns the house.We have one child 11 years old and I work full time and earn 13000 a year.We are in reciept of working tax credit,child tax credit,Child benefit and nothing else. My question is: are Ctc and wtc based solely on the childs parents' income and not linked in any way to Mum's income.

She is 69 on pension and pension credit guarantee plus dla full award,

anyone who can put my troubled head to rest would be appreciated

Indie_Kid

WTC & CTC are based on the income of the claimant and their partner if they have one. It has nothing to do with the income of your mum.

greenman1234

That's good to hear.Many thanks for taking the time to reply.I don't understand why tax credits don't fall into the same means testing as other such as income support and housing benefit.Could you explain why if you have time?

zagfles

greenman1234 wrote: »

That's good to hear.Many thanks for taking the time to reply.I don't understand why tax credits don't fall into the same means testing as other such as income support and housing benefit.Could you explain why if you have time?

In the early years of the previous govt Gordon Brown had a dream of integrating the tax and benefits system. But he faced a major problem - tax is assessed against individuals but benefits are assessed against families. He could have moved to the sort of tax system most other civilised countries have where taxation takes account of dependants, but that would mean raising tax rates and he'd made a stupid promise not to do so, and it would have annoyed his rich supporters.

So tax credits were the compromise - instead of a decent integrated tax system, we have the current mismash of tax, tax credits, and benefits. Working families are way overtaxed, because no account is taken of dependants in the tax system, and then have to claim some or all of their tax back in "tax credits". Out of work families had some of their benefits moved over to tax credits but the end result is much the same, except more forms to fill in. Similar for the disabled, and even single people/couples with no kids or disabilities on low pay.

End result is good support for families and the disabled on low pay, but very high marginal tax rates as they start earning.