Tax Credits Are they always paid on last years earnings

Linda32

Hello all,

I wonder if someone can help.

I am currently unemployed and my JSA-C based is about to run out. (I have applied for JSA-I Based and am waiting to hear)
My Partner works full time 38 hrs per week.


My question is concerning Working Tax Credits only, no children. We have applied for Working Tax Credits but can't get them as we both earned too much last tax year, (which I thought was the case)

Now, assuming I am not entitled to JSA-I based, (worse case scenerio) and my partner earns about £14000 before deductions. Are we likely to be able to receive Tax Credits on the current years income (After April 5th 2011) or is it always paid in arrears.

Hope this makes sense. When I first rang Tax Credits to apply, the advisor did say "that we take current years earning into account as well"

I'm abit new to this, I'm afraid, so any help would be appreciated and I'll try to answer any questions which I've not made clear.

zagfles

You won't get JSA-I as your partner earns too much. You will probably get some WTC this year and next, but not much as I think JSA-C is taxable so that'd count too.

The income they use initially is the previous tax year's, but it is adjusted based on the current year's. If the current year's is lower you can get more, or if the current year's is higher you might get less (but there is a disregard for increases to avoid the overpayments farce in previous years).

If you've applied for WTC and got a nil award you can phone them and tell them your expected income this year and you may get some now. But you'll need to include any taxable benefits eg JSA-C.

Linda32

zagfles wrote: »

If you've applied for WTC and got a nil award you can phone them and tell them your expected income this year and you may get some now. But you'll need to include any taxable benefits eg JSA-C.

Hi, Thanks for that, Yes we have been given a nil award.

Our income this tax year will be over the £18,000, am I correct that is the guaranteed income that tax credits make your earnings up to?

However after 5th April 2011, and until I get a job, my earnings will be nil, with they take that into account when the new tax year starts? and then award us something.

zagfles

Linda32 wrote: »

Hi, Thanks for that, Yes we have been given a nil award.

Our income this tax year will be over the £18,000, am I correct that is the guaranteed income that tax credits make your earnings up to?

However after 5th April 2011, and until I get a job, my earnings will be nil, with they take that into account when the new tax year starts? and then award us something.

Tax credits don't make your income up to any guarantee, but £18k is about the level over which you won't get anything unless you have kids or disabilities.

In April you can phone them and tell them you expect to earn £14k and you'll get some WTC on that basis - about £30 a week - BUT if you get a job later in the year and earn over £4000 before the end of the tax year you'll have to pay it all back. Unfortunately for you the disregard won't apply because it applies to increases between one full tax year's income and the next.