Very confused about tax credits. Please help.

marliepanda

Hello

Thank you for any help you can give me on this issue. I am totally naive to all of it and have no idea about tax credits.

Last year my boyfriend turned 25 and therefore was eligible for tax credits as earning under the threshold. he gets £20 a week so I am not sure how far under it he is. We do live together, but I am 24, so not eligible on my own for them.

At the time he applied I was not working having just come out of University. I had tried to claim JSA etc but was refused on the basis of his income. I received absolutely no help from the govt (no HB, council tax relief, JSA etc)

Shortly before I got a new job we stopped 'living together as a couple' We did still live together but he moved into the guest room as we still had a long lease on our current flat, and the split was very amicable and was just due to some difficult circumstances that needed our attention. We had separate finances, and split all bills 50/50 as my new job paid similar to him.

I have a worried feeling that the tax credits may have been applied for as a couple (albeit with me having zero income at that time)

Roll on round to now and very recently we have decided to make a go of things again. I am now worried that my income added to his will mean he is not eligible for tax credits, and they will make him pay back all the way back until I got a job which was back in September, even though we were simply 'roommates' Will he no longer be eligible (his take home is around £950, mine is around £800 per month) and how do they usually handle repayments.

As we were still living together, are we able to 'prove' that we were not financially a couple? (Before anyone asks, the split was not engineered so I could claim benefits away from his income, I have never received any benefits in my life)

If I have missed anything out please feel free to ask me and I will do my best to answer.

NotSuchASmugMarriedNow

IT doesn't matter whether you are living together as a couple or just living together tax credits are based on your household income. They aren't interested in whether or not you are intimate with the other adults in the house:rotfl:

To answer then, yes, you will be treated as a couple.

marliepanda

NotSuchASmugMarriedNow wrote: »

IT doesn't matter whether you are living together as a couple or just living together tax credits are based on your household income. They aren't interested in whether or not you are intimate with the other adults in the house:rotfl:

To answer then, yes, you will be treated as a couple.

Thanks. I didnt realise it was based on 'household' income. A few of my friends get it living together, maybe they don't form one household (differing tenancy agreements maybe) The wording on the site led me to believe it was based on 'single people' versus couples.

Do you know if we will not qualify based on the numbers I quoted. And if we do have to pay back, is it lump sum or can it be installments. I am a bit worried now. I know we should have sorted it at the time but sadly too many other things going on and it didnt cross our minds

Edit again: Sorry as I said I have such little understanding. As tax credits are based on 'last year' I think we will probably still qualify as I did not work for the full year (didnt hit my personal tax threshold for example) does that mean the credits will continue based on out last year income and then probably stop next year?We haven't had any sort of renewal pack yet.

zagfles

You will be seen as a couple. Anyway presumably you claimed jointly, a joint claim would have to have been closed and reopened as a single claim.

But you probably won't have an overpayment last year, because there's a £10k disregard for income increases so assuming you earned nothing in 2010/11 and it was just based on his, it doesn't sound like your joint income would have gone up by more than £10k in 2011/12 as you were only working half the year.

You might have an overpayment from April onwards, in fact you might not be eligible at all from April.

marliepanda

zagfles wrote: »

You will be seen as a couple. Anyway presumably you claimed jointly, a joint claim would have to have been closed and reopened as a single claim.

But you probably won't have an overpayment last year, because there's a £10k disregard for income increases so assuming you earned nothing in 2010/11 and it was just based on his, it doesn't sound like your joint income would have gone up by more than £10k in 2011/12 as you were only working half the year.

You might have an overpayment from April onwards, in fact you might not be eligible at all from April.

I didnt earn over 10k you are right. I didnt hit the tax allowance so that must be under £7000ish? I worked for 6 months and didnt get a grand a month so it'll be under 6k.

I did work for a little in 2010/2011, only for a few months though and I dropped back down to only weekends when I started back up at Uni after Summer (and left completely in January) so again that may have been a couple grand? So not it cannot have gone up more than 4k between those 2 years.

If its just overpayment from April that is fine, as thats just over £100. I was just panicking we would have to pay it all back from August (which would be fine if we were not entitled to it of course but in a lump sum would have been tough times!)

marliepanda

Sorry to double post, but should we ring and tell them about my work tomorrow (I assume they will already know but we have not informed them, naughty, I know...)

Or shall we wait for the renewal pack?

Icequeen99

NotSuchASmugMarriedNow wrote: »

IT doesn't matter whether you are living together as a couple or just living together tax credits are based on your household income. They aren't interested in whether or not you are intimate with the other adults in the house:rotfl:

To answer then, yes, you will be treated as a couple.

That is not correct. It isn't based on 'household' income of everyone. It is based on the household income of those on a claim.

You only make a joint claim if you are married or are 'living together as husband and wife'.

So if you were not living together as husband and wife, and were essentially just flat mates it should be a single claim.

Proving that you were not a couple is another thing though.

IQ

marliepanda

Icequeen99 wrote: »

That is not correct. It isn't based on 'household' income of everyone. It is based on the household income of those on a claim.

You only make a joint claim if you are married or are 'living together as husband and wife'.

So if you were not living together as husband and wife, and were essentially just flat mates it should be a single claim.

Proving that you were not a couple is another thing though.

IQ

Honestly if what 'zagfles' has said is true (about me being allowed to go up 10k a year (when I only went up a few k, max of 5 but probably less) from 2010/11 to 2011/12 then I won't even bother trying to tell them that story.

Its been a joint claim since it was started in perhaps June ish of last year, so there is no point me saying oh well we stopped her and started up again here IF it is not going to make a difference to overpayment.

I am happy to repay all of the tax credit back from April if we are no longer entitled. (I would be happy to repay back to September if necessary but in one lump sum that would be more of a financial stretch)

Icequeen99

I think that is fine.

I just didn't want other people reading this to mistakenly think anyone living in the same house had to claim jointly and that income of everyone in the house was taken into account. Only certain people in a household are required to make a joint claim.

IQ

marliepanda

Icequeen99 wrote: »

I think that is fine.

I just didn't want other people reading this to mistakenly think anyone living in the same house had to claim and that income of everyone in the house was taken into account.

IQ

Thank you for that!

I was a little worried for my friends as I know at least 3 of them live together and all get WTC when I am sure their combined income would be way above the limit!

What do you think of my last question? Do you think I should call and inform them (even though itll be 6 months late *eek*) or wait for the renewal package?

zagfles

It's really too late now. Splitting up/getting together with a new partner is a change you must tell them about straight away, you would need to have closed down the joint claim and reclaim as a single claim. The single claim would be a brand new claim, which you won't be able to backdate more than 3 months (or maybe even 1 month?).

That's besides the fact they are unlikely to believe you were temporarily single while living in the same house as your ex, with whom you've now got back together!

It won't gain you anything anyway, if fact it'd probably lose you as you'd have to repay all the WTC you got while you were single and were claiming jointly, and the new single claim wouldn't backdate that far.