Working Tax Credit changes

Msparlabane

Hi, new here but having a minor panic attack so hoping somebody can help! I've just looked at my bank statement and found that this month's Working and Child Tax Credit payment is almost £200 less than usual.

I thought I'd read and understood the changes to Working Tax Credit and that they wouldn't affect me too badly, so I'm confused as to why there's been such a drop. I'll contact Tax Credits tonight but wondered if anyone here can shed light on it in a way that makes sense for me.

I've completed the benefits checker on this website and it does look as if I'm entitled to barely any Working Tax Credit. I'm a single parent with one child and I have a full-time job working 40 hours per week at £8 per hour. I don't pay any childcare costs. Is there someone who can advise why I may have lost so much each month??

Thanks!

Ann

shop-to-drop

I think you will find you earn too much to qualify now as your annual salary is over £16000. You will probably only get child benefit now. You need to check this with them ASAP to be sure.

zagfles

Was your income a lot higher in 2011/12 than it was in 2010/11? Due to the disregard there's a delay in tax credits decreases when income increases, so it can come as a shock.

Msparlabane

Thanks for the info, both. My income was a little higher in 2011/12 but not much. I'll try to speak to Tax Credits this evening to double check. Not sure how we're going to manage with such a big drop each month - so much for the media headlines about families being £500 per year worse off.....eek!!

pmlindyloo

There is a very useful guide here:

http://www.hmrc.gov.uk/leaflets/wtc2.pdf

Keep scrolling down - there is a table for income threshold for tax credits - it's a long way down!

Tax Credits are extremely complicated.

Have you received a letter of your award for the year 2012/2013?

I don't know of anything in the tax credit changes for 2012 which would affect you in such a way.

Good luck!

zagfles

It doesn't sound like the budget changes should have affected you - if you earn around £16k you should get a little WTC and full CTC. Your CTC should have gone up a little.

I think this must be because of income - were you working for the full tax year in 2010/11?

Msparlabane

Thanks for the helpful info. I haven't had an award letter yet (unless there was something in today's post. I've worked full-time since Feb 2011, prior to that I had a part-time job and was also self-employed. My income for 2010-11 was around £15,000 as I remember. I'll have a look at the leaflet and see if that helps!

Icequeen99

Msparlabane wrote: »

Thanks for the helpful info. I haven't had an award letter yet (unless there was something in today's post. I've worked full-time since Feb 2011, prior to that I had a part-time job and was also self-employed. My income for 2010-11 was around £15,000 as I remember. I'll have a look at the leaflet and see if that helps!

it sounds like it is because your income has increased. Tax Credits are based on previous year income. So if you had a low income in 10/11 your 11/12 award was based on that, but your 12/13 award is based on the higher 11/12 income which means your tax credits will fall.

A 200 per month drop would equate to an income rise of around £5500 . Are you sure 10/11 wasn't less than £15,000 if you only worked full time from Feb 11?

IQ

Msparlabane

Hi all, I've just spoken to Tax Credits and they're saying that it is because of the income increase in the move from self/part-time employment to full time. I lose all of my Working Tax Credit apparently so my payments have effectively halved, losing £230 per month. I have no idea how I'm going to manage.but I'm going to have to try. I do wish their paperwork was clearer, I have to say - it's such a difficult system to negotiate and understand.

Thanks to everyone for the info and advice.