I'm very confused about my friend's entitlement

zagfles

First of all there is a difference between being entitled to WTC and actually getting any.
If she is working and earning over £18000 then she is entitled to WTC, but her income is too high to actually get any. So the combined table is the correct one to use. But it'll all be CTC that she is paid.

The reason is that as she is entitled to WTC, the income taper is used against the WTC elements first, then the CTC elements. So although she won't actually get any WTC on £18k+, as the WTC elements have been tapered to zero, her CTC is higher than it would have been if she wasn't entitled to WTC. Because more of the taper has been used against the WTC elements.

Confused??

Badger_Lady

zagfles wrote: »

First of all there is a difference between being entitled to WTC and actually getting any.
If she is working and earning over £18000 then she is entitled to WTC, but her income is too high to actually get any. So the combined table is the correct one to use. But it'll all be CTC that she is paid.

The reason is that as she is entitled to WTC, the income taper is used against the WTC elements first, then the CTC elements. So although she won't actually get any WTC on £18k+, as the WTC elements have been tapered to zero, her CTC is higher than it would have been if she wasn't entitled to WTC. Because more of the taper has been used against the WTC elements.

Confused??

Actually no, that's crystal clear Love it! So that's why a combined claim is higher - because the WTC is swallowed up, but it buffers against the CTC so that its final value is higher than it would have been without.

Hurrah!

Oldernotwiser

Badger_Lady wrote: »

Arg, actually now I've taken another look and it still doesn't make sense!

IF they were earning exactly £20,000 then they would get £3,965 CTC, or £4,755 CTC+WTC. But hang on, if someone earning over £17,729 isn't entitled to WTC, then why is that combined value higher???

That threw me too - just when I thought I had it sussed!

ska_lover

OP are you obsessed with your friend? To spend all this time mulling over her incomings? You are rather scary.

Sixer

T

Oldernotwiser wrote: »

That threw me too - just when I thought I had it sussed!

All's you need to remember is that it's ONE tax credits claim and you add together ALL the elements you're entitled to, including the various WTC elements if you're working, THEN reduce by the taper according to income.

It's confusing because out-of-work people with children are entitled to CTC not WTC. The CTC-only table Badger Lady posted is applicable to, for example, JSA claimants with children.

Badger_Lady

ska_lover wrote: »

OP are you obsessed with your friend? To spend all this time mulling over her incomings? You are rather scary.

Thanks!

Wow... when I started a thread on the redundancy board to figure out another friend's situation I got a load of "what a good friend you are to help". Over here it's all "aren't you horrible"! I'm only going to this effort in order to help make sure good people get what they're entitled to - I'm not really sure what the point would be of my starting a thread otherwise!

Anyway it doesn't really matter - my friend has had a read of this thread and can now understand what the HMRC person was supposed to say but failed so dismally to communicate. That's all we needed!