Tax Credits when one parent is working

ironman1

Wondering if someone in the same position can help.

Me and my GF had our baby four weeks ago and have now sent off for Child Benefit. We are both 25 and live in a Shared Ownership property half mortgage half rent.

My GF went on maternity leave in early March. I am self employed in the building trade. Our joint earnings last year before tax only came to something like £25,000. I was on the cards last year but this year I went back self employed late Jan so have to give figures earned from last april to this, with three months worth a bit of an estimate as I have to take out travel and tool money etc.

Anyway after going through the questions over the phone the woman came back that we'll get, at her estimate, £10 a week. Does that seem right?

I know we won't find out until we return the form in more detail but 40 quid a month is less than I expected we'd get. On here I remember someone who helped me out with this question said we'd get around three times that at least.

Is it because I gave the income figures before tax? Or are we really looking at a tenner a week which will be a big struggle

slkh

The best thing you can do is go on the direct gov tax credits website and do an online calculation, they tend to be very accurate as you can put in all your circumstances. I would imagine you will be entitled to child tax credit but not the working tax credit as the earning threshold for this has decreased this year but again I'm not sure how much child tax that would be. It does goes go on your previous year's income total so it may mean next year it will increase if your income is less but being self employed you are probably best keeping in touch with them regular with update's of your income to ensure the payments are correct throughout the year. If your partner returns to work you should also be entitled to help with childcare cost's.

nottslass_2

Its because of last years income.


Instead of using last yeras figures,you can get them to calculate your award on an estimate of what you expect to earn in 2011/12.
( remember to keep them upadated regually,so you don't get an overpayment)

Remember to deduct £100pw for each week your GF receives SMP,as this isn't incuded when calculating your award.

ironman1

My laptop is not working so cant do a calculation at the moment. I will be earning quite a bit more on paper this year. But £10 a week is not ouch use to us. Basically means my GF has to go back to work as soon as the statutory pay runs out, then we have to pay childcare costs. Will be very hard, it works out that if it stays the same we seriously wont afford our basic bills and mortgage on my wages and the £120pm benefits (child and tax). Scary really

flutterby_lil

Did you not think about this before you had the baby though? Not being funny, just asking?

sue1976

If you earn more than £25,000 as a combined income then you will be entitled to £545 for the year - so the £10 a week sounds about right.

ironman1

Thought about it of course but not sure what exactly we would be entitled to. Then again working usually means little help doesn't it, silly us having a baby really!

MissMoneypenny

ironman1 wrote: »

Thought about it of course but not sure what exactly we would be entitled to. Then again working usually means little help doesn't it, silly us having a baby really!

When you start a family, the parents' have to make sacrifices in their lifestyle.

Why don't you over to the old style board and debt free wannabe boards to get some good tips on how to cut your outgoings; and the up your income board to see how to increase your incomings.

You won't stave. When we had children, it shocked me how much money we were wasting before we had children.

cte1111

If your girlfriend is on maternity leave, then technically she is working according to tax credits calculations. When she goes back to work and you are paying tax credits you might be entitled to more help. Best to do calculations of all possible scenarios so you can both work out the different options.

ironman1

The silly for having a baby comment was tongue in cheek! We have made alot of sacrifices, we haven't been out together since he was born, we have stayed in alot.

I honestly don't see where else we can save money. I can list what our outgoings are here now, other than the ones I write we have nothing else to pay for. My GF had a debt of nearly £3k to pay for (well I paid) so that was most of our savings gone.

MORTGAGE: 490
RENT: 225
SERVICE: 128
COUNCIL TAX: 96
GAS: 14
ELEC: 22
WATER: 15
INSURANCE: 18
SKY/PHONE/INT: 65
FOOD/OTHER SHOP: 120


Other than those, I have to pay £110 a month for travel to work. We have sold the car so don't have to pay anything for motor costs. TV licence was paid up front. Our mobile bills come to only £30pm and thats for both.

Considering i'm only getting around £1,270 after tax a month, where will we be when my GF's maternity pay stops in October?!

The only other income will be £120 or so from Child Benefits.

The ONLY bill we can really cut down is Sky. Obviously we will if we have to but for around £16 a week for channels, phone calls, line rental and quick Broadband thats a decent deal. Plus it helps with staying in having good tele to watch.

Not sure how people do this to be honest

bestpud

Child benefit is around £80 every four weeks so I'm not sure where you get £120 from...?

Your tax credits are based on last years income. With one child and a joint income of around £22k, we receive £30 somet per week CTC.

You can call them and say your income has dropped considerably, and they will increase your payments.

Be careful though as you will lose the income disregard!

As it stands now, you would receive any undrpayment in a lump sum on renewal next year, and, if your OH returns to work, or you earn more than you thought, you won't have an overpayment.

If you ask them to lower your estimated income, your payments will rise, but if you go over the income you estimate, you will immediately fall into an overpayment.

Sooo, if you are going to do that, think carefully about whether your OH will return to work before April 2012 and add on her predicted earnings if you think she will.

Also think carefully about your predicted income and keep a very close eye on it. I recommend overestimating, just in case.

Call them immediately if your income reaches the estimate, so they can adjust your payments before you have an overpayment.

If you made a low estimate and then your OH returned to work, and you had an unexpected large income, you could still have a small overpayment, or you could end up with no tax credits for the rest of the year.

I hope that makes sense?