Really confused re changes in tax credits

rosefaye

Can anyone give me an idea of if we will still get tax credits towards nursery fees and if so if they will reduce a lot? I've been trying to read all the details but it makes my head spin.

We have 2 children in nursery part-time at a cost of £300 a week.

In 2009-10, I was self-employed working 16 hours a week and my husband was employed working 37 hours a week. Our combined income was £29,000. Based on that, this year we have been getting £180 per week towards nursery fees.

In 2010-11, we have both been employed working the same hours. Our combined income for 2010-11 will be £37,000.

However in 2011-12, I have the option to increase my hours which would increase our income to £45,000.

Will the award from 2011 be based on an income of £37,000? Can anyone give an idea how much that might be? Or will we get no money as soon as our income goes above £40,000 in 2011-12?

I don't see how we can possibly find an extra £180 per week when my salary won't increase by that much but I really don't want to either stop working again or take the girls out of nursery, they love it and have so many friends.

zagfles

It'll be based on £37k provided your income next year doesn't go above £47k (there's a 10k disregard).

You're looking at a big cut but you will get something - about £167pw total CTC & childcare.

Ignore any rubbish you read about a 40k limit on tax credits - with 2 kids and high childcare costs you'd get tax credits on well over 50k.

rosefaye

Thank you. I should have clarified that we get £180 a week total, not just the childcare element. I just put it all towards nursery so I think of it as all towards nursery.

So I don't suppose it will be £160 a week but it is good to know I can increase my hours a little and we will still get some help. Roll on September 2012 when the elder starts school and the younger will be 3 and start getting LEA funding!