Working Tax Credits

PhoenixDF

Hi,

I started getting working tax credits from the 24th April 2011 and the results were determined using my earning from the previous year (only aroun £4k as I was a student) and my current earnings when applying which was £12,500.

Since July 2011 my wages went up to £14,500 and I am about to phone up the department to inform them of my changes for the next year.

I'm really worried they're going to say that I've been overpaid because of the £2k difference in my wages but the decision letter I had states it's based on my previous years earnings.

Does anyone have any experience in this? I'm getting quite stressed out about this situation because I can't really afford to lose the extra £219 per month that I am currently getting as its the only thing keep my above water with my rent going up, bills going up etc Thanks for any help!

Pepzofio

When you say your wages went up, I'm assuming you mean that your annual salary increased to £14.5k, rather than your earnings for the year?

If so, then you are unlikely to have been overpaid this year, as you can earn up to £10k more than the previous year without it affecting your award. So if you earned £4k last year you could earn £14k this year without a problem.

A £2k increase to your annual salary wef July = approx £1.5k for the tax year, so £12.5k + £1.5k = £14k earned this year.

If your earnings this year have increased to £14.5k, then you will have been overpaid, but as it is only the increase above the £10k disregard that is counted (i.e. £500) it should only be about £205 for the year.

However, from April your award will be based on your earnings for this year, so your tax credits will be very substantially reduced, if not stopped completely. Based on the amount you are receiving at the moment, I am assuming you are a single person with no dependents or disabilities? If so then you will not be entitled to anything next year.

I'm surprised that you were expecting your current payments to continue even on a salary of £12.5k - does your provisional award not give estimated payments for next year? As these should have given you some indication that you were not going to get £219 forever.

georgiasdragons

Im in the same position, i earnt £12500 last year and declared i would earn 12500 by the end of this april, In fact i will have earnt £14500 as im having some bonus.

Someone told me i wont have an overpayment from 2011-2012 because of the 10K disregard but it will effect payments from April 2012 onwards as i will get it on the higher salary than before.

Its all so confusing !

PhoenixDF

I'm glad to see that I am not the only one confused by this so far, but from Pepzofio's explanation its now alot clearer and I've got a lot less to worry about.

I've decied to just look for a better job as I've been after a junior graphic designer position since graduating from Uni in 2010 and I've got an interview next week. Fingers crossed as the wage would be around £18-19k