Redundancy and inheritance - what impact on tax credits?

The_Big_H

Hi, hoping someone will know the answer to this scenario;

Basically, my wife and I have a joint income of around 27k pa. We have 5 children aged 7 through to 15, and have always worked to support them. We do get Childrens Tax Credits which helps enormously.
We find it hard to make ends meet, but we manage just about.

Two events that may impact us have happened.

I have been given notice of redundancy by my employers. I've been there 13 years and will receive 13 months pay. It'll be around 25k, and will be tax free. It's a nice sum but the hard part is finding work, I cannot and will not sit on the money. I want to return to work as soon as possible and would do any job that pays the bills. It's important for me that my children see me working to pay for life's necessities.

I know the redundancy money is non taxable, so I'm fairly certain it won't affect our tax credits. Can anyone confirm this please?

There is another situation that has developed.
4 weeks ago my father unfortunately passed away suddenly.
As he died while employed, his employers may (at their discretion) pay his death in service to me, as there is no widow or other next of kin. He also had a couple of pension policies. Again, they tell me that they could pay a discretionary settlement to me as next of kin.
I don't know that total, it could be tens of thousands or could be minimal - it's unknown.
However, with this again being non-taxable could I potentially lose CTC?

Would I need to make a declaration to the government?

I'm not a dishonest person, I'm probably too honest for my own good actually and would never cheat the system. However I don't want to lose income if I don't need to. I still need to think of my children and put food on the table.

Any advice is very very gratefully received.

[Deleted User]

as this includes one known additional income and one as yet as known,perhaps the ctc helpline would be the best place to start?
good luck looking for another job,it wont be easy but stay positive

allen35

Hi

Your redundancy pay shouldn't impact on CTC and you may be entitled to additional credits due to the drop in income whilst looking for work,

Due to the amount involved, you wouldn't be entitled to Housing/Council tax Benefit due to having capital over £16000

With regards to other possible capital, tax credits are based on income from savings rather than savings alone which affect other benefits(means tested) so it would be next year if there was any interest you would have to declare and there is a disregard so impact wouldn't be great

Accept my condolences on both matters and wish you well with job search