Live after House Sale - Working Tax Credit

masueuk

Hoping someone can help me with this. We sold our house in April and after paying all debts were left with about £30k. My mother died last year and after all costs will inherit roughly £15k. We have been in receipt of WTC for a few years. I told them of my change of address and that we now live in rented accommodation. Both my OH and I received the disability portion of WTC, due to his physical and mental health problems and my mental health problems. He also received DLA with motability car. He has now lost DLA due to changed criteria. WTC contacted us to ask about disability. I am now convincing myself that it is unlikely that we will now qualify for any WTC. Our health is the same or worse (in OH case and mine as this continues). If I decide to stop WTC apart from the financial hit, what are the consequences? The money from the house is currently sitting in a non interest bearing account but it will be going into a long term saving product for our old age. We are both working for beans in our business as it has been a very hard year relocating, losing our son, then my mother.

I am terrified this might end up with us having to pay them thousands. Should I just phone them and say we find the stress of claiming too much and want to end our claim? What happens then re the HMRC? Hope someone can shed light on this.

princessdon

How many hours a week do you work?

I take it you are still working and if so why end your claim?

masueuk

Yes we are both still working over 30 hours, but my fear is that they will view our disability along the lines of the new DLA criteria, in which case neither of us will qualify and if they back date it, we will owe them lots of money.

princessdon

You need to ring them up explain that from XX date you no longer get DLA. They *may* remove the disability element FROM that date, but that is the worst that can happen.

Spamfree_2

Can you get working tax credits when you have £45000 sitting in the bank?

Any why should you if you have £45000 sitting in the bank?

princessdon

Spamfree wrote: »

Can you get working tax credits when you have £45000 sitting in the bank?

Any why should you if you have £45000 sitting in the bank?

Indeed you can, stupid really, can't see why but ATM permitted. A family just above the breadline with no TC paying full tax and NI are not permitted to claim but families who CHOOSE to work 24 hours a week between 2 with for eg teenage children (no disabilities) and £000's in the bank can claim.

Strange old benefit system we have isn't it.

But OP is entitled at the moment (the only part in question is the disability element).

masueuk

Thank you Princess Don. We are not trying to swindle anyone. The money we have now is there because we had to sell our house and my mum died. It isnt for spending now, its for our old age, if we reach it. Does anyone have knowledge of the WTC criteria for disability element, ie has it changed in line with DLA changes to criteria, in which case unless we chop our legs off, there will be no chance of getting it. I realise that to some people here, having the money we do have causes them some annoyance, but if I could have my mum back as an option rather than money, I know which I would choose. Not sure what some of the abbreviations mean. ATM ? OP ?

Thanks again

princessdon

http://www.hmrc.gov.uk/manuals/tctmanual/TCTM02530.htm

I believe that is the current qualifiers - But to be honest I'd check with them if DLA has stopped (others will know more)

ATM = At the Moment. There are plans afoot to stop Tax Credits for people with savings (in line with benefits). This is correct, in my opinion as benefits are benefits, but it is not here yet.

Op = Opening Poster (ie you)

PasturesNew

I thought they did take savings into account - and assumed a set %age income of interest on the money, whether you get that much or not.

antrobus

Spamfree wrote: »

Can you get working tax credits when you have £45000 sitting in the bank?

Yes. WTC is means tested but there is no capital limit.

Spamfree wrote: »

Any why should you if you have £45000 sitting in the bank?

Dunno. Ask Gordon Brown, it was his idea.

BigAunty

Tax credits will be scrapped in the move to the Universal Credit system which starts rolling next year until 2017. This means that UC will take into account savings for means tested benefits, the opposite of tax credits now. (I don't know the position at all for disability benefits under UC).

Download the UC proposal paper on the DWP paper to understand how capital will be treated and the allowances for those with disabilities. There is transitional protection.

You do say the money will go into a long-term saving product - do you mean a formal pension? If this 45k is your proposed ring fenced way of helping you in old age, and not for business investment or property buying, for example, then perhaps you could look into a pension as pension contributions (as far as I know but do verify) are not viewed negatively unlike other spending which can get investigated by the DWP/HMRC. Other investment products that you can access like bonds/ISAs and so on, get classed as capital. Pension funds do not.

You could model the changes to your DLA on tax credits on the Turn2us online benefit calculator. This might show the full impact of the loss of WTC.

As far as I know, lump sums/big savings do not affect eligibility of tax credits but interest over £300 per year have to be declared and can influence things. Hopefully another MSE poster can clarify the position.