Tax Credits - is this correct? 30 April 2012 at 7:52PM in Benefits & tax credits 10 replies 1.4K views

scw1

Our claim stopped beginning of the month as we were just over the £32,250 limit (we have 2 children). I have finished work as of last week so our income for 12/13 will be £30,000 or thereabouts which I assumed would make us entitled to something. However, having just spoken to an advisor he said they disregard the first £2,500 so we are still over the threshold and that will only change if income goes down further or we have another child.
obviously I wasnt expecting much money but thought we would have been entitled to something? Any ideas? Thanks

Icequeen99

scw1 wrote: »

Our claim stopped beginning of the month as we were just over the £32,250 limit (we have 2 children). I have finished work as of last week so our income for 12/13 will be £30,000 or thereabouts which I assumed would make us entitled to something. However, having just spoken to an advisor he said they disregard the first £2,500 so we are still over the threshold and that will only change if income goes down further or we have another child.
obviously I wasnt expecting much money but thought we would have been entitled to something? Any ideas? Thanks

Unfortunately that is correct.

However you will be entitled in 13/14 unless any further drastic changes are made.

IQ

bujin

If the income is a lot lower, say £6000 lower is the first £2500 still disregarded? Therefore only a shortfall of £3500 ?

Icequeen99

bujin wrote: »

If the income is a lot lower, say £6000 lower is the first £2500 still disregarded? Therefore only a shortfall of £3500 ?

Yes, first 2500 is disregard. So if your income last year was 26000 and you estimate 20,000 this year they will treat you as having income of 22,500.

Of course in 13/14 your payments will be based on actual income of 20,000.

IQ

bujin

Icequeen99 wrote: »

Yes, first 2500 is disregard. So if your income last year was 26000 and you estimate 20,000 this year they will treat you as having income of 22,500.

Of course in 13/14 your payments will be based on actual income of 20,000.

IQ

But last year (beginning of new tax year 2012) I told them my income for 2010/11 and then in the same phone call, I also said I'd have a lower income in 2011/12 and they based my WTC on the lowered income not on the previous one.
So in your illustration of £26,000 we'll say that's what I earnt in 2010/11 and I knew in 2011/12 I was going to earn £20,000, they haven't made me wait until this Tax year to have an increase in benefit, they did it straight away, which doesn't concur with what you're saying. My benefits were also based on £20,000 not £22,500.

Is the £2500 something which has come into play this year though?

zagfles

bujin wrote: »

But last year (beginning of new tax year 2012) I told them my income for 2010/11 and then in the same phone call, I also said I'd have a lower income in 2011/12 and they based my WTC on the lowered income not on the previous one.
So in your illustration of £26,000 we'll say that's what I earnt in 2010/11 and I knew in 2011/12 I was going to earn £20,000, they haven't made me wait until this Tax year to have an increase in benefit, they did it straight away, which doesn't concur with what you're saying. My benefits were also based on £20,000 not £22,500.

Is the £2500 something which has come into play this year though?

Yes. It's new this tax year.

salsa2

Thanks. Any thoughs on Ice queen's interpretation and my own experience differing?

zagfles

salsa2 wrote: »

Thanks. Any thoughs on Ice queen's interpretation and my own experience differing?

How do they differ?

salsa2

Well her suggestion is that a claimant doesn't receive a change in benefit until the following year, she states that I wouldn't receive a rise until 13/14 beasde on the lower figure of £20,000 and my experience was that they altered the benefit amount in the current year, just after I'd told them in fact.

zagfles

salsa2 wrote: »

Well her suggestion is that a claimant doesn't receive a change in benefit until the following year, she states that I wouldn't receive a rise until 13/14 beasde on the lower figure of £20,000 and my experience was that they altered the benefit amount in the current year, just after I'd told them in fact.

Where did she state that? She just said the first £2500 will be disregarded, which it will. The amount paid will probably still increase if the income drop was more than £2500.

Icequeen99

I didn't say you had to wait until the next year. I said that when the 2500 disregard applies, they would use an income of 22500 (if you had income of 26000 11/12 and estimated 20000 12/13), then in 13/14 they would use the actual 20000. They would amend your award straight away based on your estimate but not the whole estimate, they would use 22500 instead of 20000.

In 11/12 it was the same thing, but no disregard. So if you had income of 26000 in 10/11 and estimated 20000 in 11/12 they would base your tax credits straight away on 20000. 12/13 would also be based on 20000.

IQ