My sister is so worried about tax credits in April '12

moomoomama27

zagfles wrote: »

Yes they definitely will be eligible. The income level of £38k+ is the income above which they wouldn't be eligible, they are well below.

As a matter of interest, has their income dropped a lot since last tax year? Because it's a bit worrying if HMRC are sending these letters to people who are well below the threshold.

No infact their income for the new tax year is higher by about 2k than last years figures they hold. So they would have been well under based on the 38K upper limit.

Having read through the threads, I agree it is worrying as to why people who are seemingly ok are getting these letters.

shedboy94

Pepzofio wrote: »

Errrrm.... Yes thanks!

Based on 2012 rates for a couple with 3 children, no disabilities, working 30+ hrs per week, no childcare...

WTC
Basic Element £1920
Couple Element £1950
30 Hour Element £790 = £4660 Max WTC award

CTC
Family Element £545
Child Element (3 @ £2690) £8070 = £8615 Max CTC award

Household Income £30500
Less First Threshold (£6420) = £24080
41% Taper = £9872.80 withdrawal rate

£9872.80 (WR) - £4660 (WTC) = £5212.80 WR remaining, therefore no WTC.

£5212.80 (rem WR) - £8615 (CTC) = -£3402.20, therefore £3402.20 CTC awarded, or approx £65/wk as murgatroyd21 stated.




Sorry, should have clarified - even though they don't receive any WTC, doesn't mean they don't qualify for it.

If they satisfy the qualifying conditions then their max award is higher due to them getting the additional WTC allowances (or 'elements'). 41% of any 'surplus' income they have (ie above £6420pa) is offset against their max awards is a specific order (WTC, childcare, then CTC) to arrive at the actual award.

Originally Posted by Pepzofio
Do they qualify for Working Tax Credits? I'm assuming they do based on that income. On an income of £30500 they wouldn't qualify for WTC

Assuming they do work a minimum of 24 hours per week then they should get £2,612.20 a year, or £3402.20 if they work a combined minimum of 30 hours per week.

If they don't qualify for WTC then unfortunately no, they won't get any CTC based on that income. Errm they would actually qualify for CTC, your statement actually contradicts your previous paragraph which gave the entitlement amounts!!

That's why I asked if you knew what you were talking about!!

Pepzofio

shedboy94 wrote: »

Originally Posted by Pepzofio
Do they qualify for Working Tax Credits? I'm assuming they do based on that income. On an income of £30500 they wouldn't qualify for WTC

Assuming they do work a minimum of 24 hours per week then they should get £2,612.20 a year, or £3402.20 if they work a combined minimum of 30 hours per week.

If they don't qualify for WTC then unfortunately no, they won't get any CTC based on that income. Errm they would actually qualify for CTC, your statement actually contradicts your previous paragraph which gave the entitlement amounts!!

That's why I asked if you knew what you were talking about!!

OP specifically asked 'Will she still get tax credits in April'. This depends on whether or not they are eligible to claim WTC. Based on the income stated, I assumed they did, although it was possible (however unlikely) that they did not satisfy the 24hr criteria - e.g. if they both worked 10 hours and earned £15k each.

When I said 'do they qualify' I was referring to whether they worked the requisite number of hours to qualify for WTC, not whether or not they were actually receiving a WTC award!

You are still counted as receiving/claiming WTC, even if your actual award is £nil, as you receive the benefit of the WTC elements when your award is calculated.

I then went on to give an award figure based on working both 24 & 30 hours a week, then stated the position if they just claimed CTC without WTC - i.e. no CTC. There is no contradiction.

I admit, I possibly could have explained it a little clearer, and would have done if I hadn't been on my way out. However, I don't think there was any need for you to be quite so rude in your reply - especially as if you'd taken the time to check my figures you'd have seen that I did know what I was talking about!

maggiemay2582

I came on to MSE to see if i could get any info about exactly the same problem. My friend just called me to say she had recieved a letter today to say as of april 2012 she will not longer get ctc either. Her and her husband jointly earn 27000 and the letter states that the new threshold for couples earning is 26000.

I hope this isn't the case as me and hubby earn similar between us and are struggling to feed my ever growing kids on what we have coming in at the moment. Losing 45 quid a month doesnt sound much but when your food budget is 150 quid a month to feed 4 people it is alot to lose!

Morlock

maggiemay2582 wrote: »

I came on to MSE to see if i could get any info about exactly the same problem. My friend just called me to say she had recieved a letter today to say as of april 2012 she will not longer get ctc either. Her and her husband jointly earn 27000 and the letter states that the new threshold for couples earning is 26000.

The £26,000 limit is for a couple with one child, that limit increases if the couple have more than one child, as you do.

Murgatroyd21

maggiemay2582 wrote: »

I came on to MSE to see if i could get any info about exactly the same problem. My friend just called me to say she had recieved a letter today to say as of april 2012 she will not longer get ctc either. Her and her husband jointly earn 27000 and the letter states that the new threshold for couples earning is 26000.

I hope this isn't the case as me and hubby earn similar between us and are struggling to feed my ever growing kids on what we have coming in at the moment. Losing 45 quid a month doesnt sound much but when your food budget is 150 quid a month to feed 4 people it is alot to lose!

Based on 2 adults & 2 kids, salary approx £27k and 30 hours+ = £41.29pw

marywooyeah

I thought you couldn't get WTC if you earned over £15,000? Me and my husband have never been eligible for WTC as we earned over that amount.

We only have one child and currently earn £32,000 between us so I'm guessing we'll lose our tax credits too after april.

Murgatroyd21

marywooyeah wrote: »

I thought you couldn't get WTC if you earned over £15,000? Me and my husband have never been eligible for WTC as we earned over that amount.

We only have one child and currently earn £32,000 between us so I'm guessing we'll lose our tax credits too after april.

Yes you will lose it if you have no other qualifying criteria such as disability or childcare costs.

mon1o

where are people getting 2012 figures from? me and my husband work over 30hrs per week, earn £31523 jointly, have 3 children aged 7,4 and 16 months. Childcare costs of £125 per week. I am concerned at how much my tax credits will reduce by but cant seem to find out how much we should receive as from april 2012?

Murgatroyd21

mon1o wrote: »

where are people getting 2012 figures from? me and my husband work over 30hrs per week, earn £31523 jointly, have 3 children aged 7,4 and 16 months. Childcare costs of £125 per week. I am concerned at how much my tax credits will reduce by but cant seem to find out how much we should receive as from april 2012?

£144.86pw.