Tax credits stopping in April 2012

zagfles

Charityworker wrote: »

I'm going to be losing £64 a week :eek:

Indeed you are - but as we discussed in an earlier thread you're almost the worst case scenario (min wage 16 hours with a mortgage) and even you won't lose the £4k the unions etc are claiming.

zagfles

Sparkle_Girl wrote: »

It is true than many thousands of people will lose from £76 week/£304 a month/£4k a year.

Should be "up to", nor "from", the maximum anyone will lose in WTC will be £3870. And that only applies to people earning £6420 or less.

Mainly couples with children earning less than £17,700 (which is probably where the figures you mention come from)

Again, this is rubbish. Nobody earning above £15859 will be affected by this change. Because they either won't get WTC anyway, or they get the 30h or disability elements in which case they aren't affected by this change.

Changes to working tax credits,from April, means that couples with children (not single parents and a few other exemptions) who previously were entitled to working tax credit when one of them worked 16-23 hours will have their tax credits stopped.
The couples who will lose the most (approx £76 a week) will be the poorest of the working parents who would have been entitled to the full amount.
This will include couples who are desperately trying to find more hours/work but cannot find it during the current climate and have taken part time work rather than go on the dole.

This is true, but what it doesn't mention is that the vast majority of the "poorest of the working parents" will be able to make up some or even most of the loss in tax credits with extra housing benefit/LHA/CTB and sometimes income based JSA.

Excerpt from an article on thisismoney.co.uk :

'Hundreds of thousands of families face having their income slashed by thousands of pounds due to cuts to tax credits, according to official figures.
At the moment couples with children can qualify for £3,870 Working Tax Credit if they work at least 16 hours a week.
But from April 6 this is increasing to 24 hours a week.

The changes have been branded 'unfair' and there are concerns that it could force more children into poverty as it is unclear whether in the current climate couples will be able to find the extra work.
Many of the people affected work in the retail sector which has been particularly badly hit by the economic climate.

It also means, that for many families, they will be better off on the dole.
The benefit is designed to help out those on the lowest incomes - mainly couples with children earning less than £17,700 a year.

According to the Treasury almost 900,000 people will be affected by the changes - half of whom will be children.
Shadow Home Secretary Yvette Cooper told the Independent on Sunday: 'This is a deeply unfair change that will hit parents who are working hard to support their children.'

Maybe instead of using the poor as a political football she should explain to them how they can claim other benefits to mitigate some or most of their loss.

The only people losing the full £3870 are those couples earning £6420 or less. Most of them will be renting. The loss in tax credits will lower the income assessed for housing benefit/LHA and council tax benefit, which together have an 85% taper. So most of those who lose the full £3870 in tax credits will gain £3290 in extra HB/LHA & CTB, making a net loss of £580. In addition they'll be entitled to free school meals, which could even make up that £580. Those on the lowest incomes (eg min wage 16 hours) their partner will be able to claim income based JSA.

Exceptions are the likes of Charityworker who have a mortgage, since there's no taper but a cliff-edge on SMI (it stops completely if you work 16 hours). But even she can mitigate some of her loss by extra council tax benefit and her partner claiming income based JSA.

The only people who will be the full £3870 worse off are those who earn under £6420 and either don't pay rent or council tax or have significant savings to disqualify them from means tested benefits.

Or of course those who simply don't realise what they can claim because people are more interested in using them as a political football and telling them they'll be forced into poverty, rather than telling them how they can claim other benefits to make up for their loss in tax credits.

zagfles

Sparkle_Girl wrote: »

900,000 is hardly 'virtually nobody' and the biggest losers will be the children of families affected by this.
There will not be any other benefits introduced to cover this loss and the lowest earners would already be entitled to housing and coucil tax and will not see much of an increase there.

I said virtually nobody will lose the £4k the unions, Labour and others have been bandying about. 900,000 may lose, but most will lose a few hundred, some will lose a few thousand, but very few will lose £4k.

fd1972uk

Tbh, I'm totally and utterly confused about all this, whilst I know most people's cases are different, I cannot begin to understand how people with far higher income than ourselves, seem to get large amounts of tax credits.

I earn £23k (35 hours per week) and my wife earns £10k, we have only ever been granted the minimum tax credit (my wife did earn £12.5k at one time prior to our little girl starting school and then reduced). We did receive initially £20 per week, when our kid was born, that reduced to £10 per week, now it is totally finished.

We don't have child care or the likes, could never afford it, no after school or the likes.

And having looked at the budget calculators I've seen, it seems we're going to be £200+ worse off this year? Surely that is down to the tax credit being cut as opposed to getting more tax deducted? Or am I wrong?


FD

zagfles

fd1972uk wrote: »

Tbh, I'm totally and utterly confused about all this, whilst I know most people's cases are different, I cannot begin to understand how people with far higher income than ourselves, seem to get large amounts of tax credits.

I earn £23k (35 hours per week) and my wife earns £10k, we have only ever been granted the minimum tax credit (my wife did earn £12.5k at one time prior to our little girl starting school and then reduced). We did receive initially £20 per week, when our kid was born, that reduced to £10 per week, now it is totally finished.

We don't have child care or the likes, could never afford it, no after school or the likes.

And having looked at the budget calculators I've seen, it seems we're going to be £200+ worse off this year? Surely that is down to the tax credit being cut as opposed to getting more tax deducted? Or am I wrong?


FD

Yes, you'll lose your child tax credits. There are several changes to tax credits in April, the one we've just been discussing above is the working tax credit change where couples now (usually) have to work 24 hours to get WTC.

The other main change is the removal of the family element threshold (£40000 this year), which will affect most people who only get the family element of CTC now.

fd1972uk

Sorry I didn't know I was talking about the Working Tax Credit above, we've never had it, only Tax Credits. I presumed the WTC was for joint couples who probably earned way less than us.


FD

fd1972uk

Sorry I may have mis-read that, I think you meant discussing with other members.


FD

shedboy94

Upsydaisyoh wrote: »

Obviously I am going to find you comment offensive, so if you do not want to help then please don't waste your time commenting.

There is a big difference between helping and holding your hand and repeating the same info over and over again.

stjman

Does anyone actually know when people get notified of entitlements for after April ? will they make people wait until after April 6th to see what the 'new system' generates and calculates as entitlement (presuming they have your up to date records) and then send out new letters ?

Charityworker

zagfles wrote: »

Indeed you are - but as we discussed in an earlier thread you're almost the worst case scenario (min wage 16 hours with a mortgage) and even you won't lose the £4k the unions etc are claiming.

No just £3338 :shocked: