Tax credits dropped from £500+ to £42 - help!

dori2o

tobysmummy wrote: »

We have had a letter through this morning telling us that our tax credits are dropping from £500 per month to ZERO!

Ours was based on earning a joint income of around £25,000 in 2009-2010 and having a toddler in full time childcare (£850 per month). (Hubby had been made redundant for some time during this tax year, so our earnings were lower) Last year, our earnings went up to around £43K as my husband was back in work after redundancy, yet we were still entitled to the £500, which I phoned and questioned but were assured we were entitled to.

I had no notification that this might happen, just a letter saying "we're not paying you anymore!" Income-wise it might look as though we earn a decent wage, which is true, but couple this with what we have to pay out each month in childcare, mortgage, bills, petrol, food etc, we are actually left with very little money to "play" with, and are not in a position to save for the future which really upsets me. Earning what we do, and working as hard as we work, we should be able to afford to go on a nice holiday this year, or treat ourselves to some luxuries, but we simply can't - our tax credits are needed to afford a decent quality of life - now we will be on the breadline because of our drop in income and increase in everything else. I'm struggling to understand how the average working family are allowed to be the hardest hit in the midst of these cuts and overhauls buy the coalition.

Sorry for the rant, and sorry I can't offer any help or answers to the OP, just wanted to say that I can identify with your situation and all we're doing is taking a long look at where we can cut back to try and manage, and hold out until school starts in september and childcare fee's stop.

Good luck to us all!

43K household income and you're on the breadline????????

Try living on 17k. We still have a decent life. Have one cheap holiday a year, still manage to pay the mortgage, and other bills and have little luxuries every now and then.

We simply choose not to 'keep up with the Jones's'.

Sorry if you're offended, but with a HH income of £43k, if your 'on the breadline' then you really need to look at your spending.

teabag29

Agree with previous post. We are on 18k (before tax) from my husbands job and he works 60 hours a week to get that. We have 4 kids. We havent got a mortgage so rent and we cut costs where we can (i.e. walk instead of car if possible, do shopping monthly in bulk as i find this works out cheaper for us etc). We usually have 1 holiday a year which I pay for in installments and pay all the bills and like previous poster we have the odd luxury. Even with all our tax credits we dont get anywhere near what your getting and we have 4 kids to support.

stiltwalker

Really annoys me when people post things like this, our tax credits pay for the essentials of life with no chance of any holiday let alone a nice one! I am currently doing an OU degree so that when the kids go to school I can get a job in a field which means we will still have family time, I used to work long hours in catering and hospitaliy and can't for the life of me see the point in having children never to see them because of hours worked. Tax credits are a fantastic support for low paid families and can give great opportunities but they should not be there to provide luxuries, to save as a nest egg or to overpay the mortgage. Ther is a phrase about cutting ones cloth accordingly and we have to do this for our long term goals and to provide the best future for our children, we still have lovely days out (done on the cheap) and do lots of fantastic things as a family and eat incredibly well as this is a big thing in our family but we have to make sacrifices to do this. Don't get me wrong, I would not change this we have a fantastic life - just done on a shoestring.

melly1980

teabag29 wrote: »

Agree with previous post. We are on 18k (before tax) from my husbands job and he works 60 hours a week to get that. We have 4 kids. We havent got a mortgage so rent and we cut costs where we can (i.e. walk instead of car if possible, do shopping monthly in bulk as i find this works out cheaper for us etc). We usually have 1 holiday a year which I pay for in installments and pay all the bills and like previous poster we have the odd luxury. Even with all our tax credits we dont get anywhere near what your getting and we have 4 kids to support.

yes, but as people have told you, the amount that you have to actually spend when you take into account your child benefit and tax credits will be very close to what that family has to spend.

AnxiousMum

There seems to be many who have had a good increase of income throughout the last year, have notified TC and still received the payments that they were receiving prior to the wage increase.

Could this be to do with the £25K disregard? Unless your income increased by £25K throughout the year (that you notified them of), and you gave them the correct details for the year before rather than an estimate, then your payments for the rest of the financial year would not have decreased. However, as of this week, the new financial year, your award is calculated on the new higher rate of income, therefore payments in TC have dropped.

Or.....have I missed something?

dtaylor21184

I agree with the last few posts we get similar and manage to support two young kids we have a mortgage and have a holiday I'd happily take 45k with no benefits. We have a car we need to run and childcare costs too. I think maybe you need to address your spending or debt if you are struggling. I've been suprised by how much money some high income families are actually getting I only thought it was no income families that got high amounts of support must just be us low income families that are missing out ( the people who probably need it the most)

teabag29

melly1980 wrote: »

yes, but as people have told you, the amount that you have to actually spend when you take into account your child benefit and tax credits will be very close to what that family has to spend.

No, i have added all that and its still nowhere near and i have 3 more children than the op so 3 more mouths to feed and cloth etc and if I can manage then i'm sure she can, its just about living within your means. We all want the nicer things in life but this isnt always possible. You can still have a good life with lesser money, instead of the better quality foods buy cheaper makes, instead of a trip to alton towers have a family picnic in the park, instead of travelling everywhere by car do some walking...there are always ways of cutting down costs especially on a 43k annual income. I'm sure there are thousands of families out there that would literally kill for that kind of money, i dont think some people realise how lucky they have it tbh. The op is not starving, they all have a roof over their head and are comfortable...there are many that cant say the same.

melly1980

teabag29 wrote: »

No, i have added all that and its still nowhere near .

Not the point though is it.

They earn 30,000 pounds more than you and they will get to see 7K of that at best by the time you add on your tax credits. Does that sound fair to you? Would you be happy if you had to earn 30,000 more just to benefit by 7000 (without even taking into consideration childcare and petrol?

melly1980

teabag29 wrote: »

. The op is not starving, they all have a roof over their head and are comfortable...there are many that cant say the same.

oh, I agree with those sentiments for sure, which is why I have posted similar things on this thread about the difference between wanting and needing. However the point still is that those on high earnings are percieved by yourself as being rich yet for all the additional gross income they have it is dragged down substantially while yours is given a monumental boost. If the boot was on the other foot you would not be happy if you had worked at a career all your life, studies, attended college on a night, took promotions and stressfull jobs and at the end of it you are barely better off than if youd have stayed on a **** wage and got it topped up for free.

nottslass_2

teabag29 wrote: »

Agree with previous post. We are on 18k (before tax) from my husbands job and he works 60 hours a week to get that. We have 4 kids. We havent got a mortgage so rent and we cut costs where we can (i.e. walk instead of car if possible, do shopping monthly in bulk as i find this works out cheaper for us etc). We usually have 1 holiday a year which I pay for in installments and pay all the bills and like previous poster we have the odd luxury. Even with all our tax credits we dont get anywhere near what your getting and we have 4 kids to support.

Can I suggest that you do some research and get a bit closer to the facts.

An 18 k salary will leave you about £13200 after tax and you'll receive over 10k in child tax credits per year which actually equates to just under 24k to live on

The poster with a 43 k income will take home £31,593 minus £10,200 in childcare costs leaves which actually only leaves £21,293.