Tax Credits and maternity

mrsspendalot

Hi, I'm due to go on maternity leave in June this year and will be taking 39 weeks off work. I'll get 6 weeks @ 90% wages, 12 weeks @ half pay + SMP, and then 18 weeks at SMP only. This will obviously reduce my earnings for the year, and I've read that I can take £100 per week off my earnings for 39 weeks whilst on maternity, which is fine.

My question is, do I tell them my estimated income taking this into consideration in April when the new tax year starts, or do I tell them once I've gone onto maternity leave once the change of circumstances has actually happened?

abby35

hi

i think the best thing to do is tell them now, if it isnt the right time then they will tell you to call back. At least this way its recorded that you called and also stops any overpayment etc.

DanE2010

Hiya you can do this from April 6th onwards at the start of the new tax year, you cant do it before that date as the system wont accept it.

mrsspendalot

Thanks, that's great. I guess it would be easier that way for having my HB & CTB recalculated as well, saves getting a lump sum when tax credits are recalculated and then having to sort that out with council as no doubt that would bump my income up over the threshold that week and cause an overpayment to them!

nottslass_2

mrsspendalot wrote: »

Thanks, that's great. I guess it would be easier that way for having my HB & CTB recalculated as well, saves getting a lump sum when tax credits are recalculated and then having to sort that out with council as no doubt that would bump my income up over the threshold that week and cause an overpayment to them!

I pretty sure (you'd better check) that any lump sum received in respect of TC being underpaid is treated as capital By housing benefits and not income - meaning that if you have less than 6k its not taken into account when assesing your H/CT benefit.

mrsspendalot

I have no idea - I can never understand my HB & CTB calculations! They send 30 pages through at a time and they all seem to say the same thing to me! I've just sent off my payslip for another recalculation as my hours were reduced at the beginning of January. I doubt it will make any sense when it arrives. The change to my tax credits gave rise to a £7 odd one-off payment this time, so I will see how they regard that on the HB notice when it comes I suppose.

I'm just a bit wary of estimating my income for maternity before I start in case I start it earlier than planned or go back earlier than planned and have to change everything around again. Part of me is therefore thinking to wait until the change has actually happened. BUT I don't want to end up with a lump sum and it cause problems elsewhere with overpayments. I certainly don't have £6k in savings so that is not an issue!

Sorry for all the questions, but what happens in 2012/13 tax year when I go back to work then, and my income will go up because I'm off maternity leave? Do they calculate it on the pay I got 2011/12 still even though it was unusually low due to maternity, or do I ring them and tell them I'll be back on my normal salary and they do it on that? Not been in this situation before as was a stay-at-home mum last time I had a baby!