Living with Partner; postgrad student; how many hours worked?

David333

Sorry, I'm trying to plug a few details into the various benefits checker to see what is best. With a previous question I had really helpful advice regarding housing benefit and council tax benefit.

I am living with my partner; we have no children or disabilities; and we're both over 25.

I understand that we have to work at least 30 hours to qualify for working tax credit. Can that be combined? So I work 16 hours and she works 15 hours? Would we then be entitled to the same as if I were working 31 hours and she wasn't working?

Secondly, in September I am returning to university to a postgraduate course. I have no extra income for this such as a student loan or anything like that. Will this student 'status' affect our working tax credit if between us we continued to work 30 hours?

Thanks!

enabledebra

Without children, to qualify for WTC the hours can't be combined so one of you would have to be working 30 hours at least (and of course the household income would need to be low enough to pass the means test.) Student status has no effect on WTC although some elements of student funding can count as income- although this isn't an issue for you.

David333

Just found the calculator on the HMRC website which is easier to plug figures into! How does the working hours pro rata thing work? So, from the end of September, I won't be working at all, but before that I will have been working over 30 hours. If we apply this week, we should (assuming the calculators are right) get WTC. As soon as I stop working, I assume that any WTC credit we will have been getting will be stopped.

I'm just trying to get clear in mind how it all works. I assume the 30 hours for one person is a minimum qualification to get you in the race as it were. Then the amount you get is worked out on joint income. Our joint income was low last year and will be low this year because I only work during holidays. I guess that means that if my partner doesn't work, our WTC will come and go throughout the year, as and when I work...

enabledebra

The pro rata approach doesn't apply to hours worked. Your income is based on (generally last year's) full annual income but the period of entitlement is pro rata. Roughly, if you would qualify for 5000pa if you worked the full year you will qualify for 2500pa if you work 30 hours per week for 6 months of the year.

David333

enabledebra wrote: »

The pro rata approach doesn't apply to hours worked. Your income is based on (generally last year's) full annual income but the period of entitlement is pro rata. Roughly, if you would qualify for 5000pa if you worked the full year you will qualify for 2500pa if you work 30 hours per week for 6 months of the year.

Thanks for the reply although I don't quite get it...

I tell the WTC people that between us we earned £6000 last year, that I am working 35 hours now and earning less than £9000. Therefore, we will get £80 a week (rough figures). Do they in fact assume that my figures are not going to change throughout the year?

So, in two months time, when I say that I have stopped working, they don't just stop our £80 a week. In fact, they start claiming money back from me because the £80 a week was based on twelve months' work. So when I'm not working and not getting WTC I have to pay them money...?

I assume that practically there are various safeguards in place but is that in essence what happens?

enabledebra

And yes- payments would come and go depending on when you work the required weekly hours but with an annual total of payments equating to a pro rata entitlement based on the proportion of the year over which you satisfy the working hours requirement. Basically it's a weekly/monthly benefit entitlement but is based on an annual income which is why there are so many under/overpayments when the award is 'finalised' at the end of the tax year. So long as you keep them up to date with moving in and out of 30 hours weekly work it should theoretically work out ...

David333

enabledebra wrote: »

And yes- payments would come and go depending on when you work the required weekly hours but with an annual total of payments equating to a pro rata entitlement based on the proportion of the year over which you satisfy the working hours requirement. Basically it's a weekly/monthly benefit entitlement but is based on an annual income which is why there are so many under/overpayments when the award is 'finalised' at the end of the tax year. So long as you keep them up to date with moving in and out of 30 hours weekly work it should theoretically work out ...

I'm trying to make sense of http://www.direct.gov.uk/en/MoneyTaxAndBenefits/TaxCredits/Paymentsandentitlement/entitlement/DG_174864 but think I will need to get a pencil and paper out in the morning!

I suppose that what I don't fully get is:-

Based on my income this year and last, I think that I am entitled to the full amount. I assumed that I would get this full amount for the weeks which I'm working.

You seem to be suggesting that because I won't be working for twelve months I won't be entitled to the full amount. I will just get a half amount, for example. And again, only the weeks that I'm working.

Is that right...?

If it is, how do they then make up the shortfall? By a bill at the end of the tax year...?

enabledebra

In an attempt to clarify (as it's clear you understand the principles) here is a sheet to manually calculate- much more accurate than the on line calculators http://debtsupportunit.org.uk/resources/Tax%20Credit%20Calc%20p1%2012-13.pdf
http://debtsupportunit.org.uk/resources/Tax%20Credit%20Calc%20p2%2012-13.pdf

edit - and the figures you need

http://cdn.hm-treasury.gov.uk/as2011_rates_and_thresholds_201213.pdf

David333

enabledebra wrote: »

In an attempt to clarify (as it's clear you understand the principles) here is a sheet to manually calculate- much more accurate than the on line calculators http://debtsupportunit.org.uk/resources/Tax%20Credit%20Calc%20p1%2012-13.pdf

edit - and the figures you need

http://cdn.hm-treasury.gov.uk/as2011_rates_and_thresholds_201213.pdf

I should get:-

£1,920 - Basic; £1,950 - couples; £790 - thirty hour element.

That is: £36.92 a week, basic; £37.50, couples, and £15.20 - thirty hour element.

In total, the maximum we are entitled to each week is £89.62.

Our income last year and this year is low enough that we will get that maximum from last week when I started work until the end of September when I am not longer working full-time (nine weeks at £89.62 a week = £806.58).

Then they will continue to pay us £89.62 for a further four weeks after I have stopped working (a further £358.42).

At that point things become murky. Because I am not working full time for twelve months they will realise that they have been overpaying me for the months of August, September and October. Therefore, any future WTC payments this tax year (when I work full-time again in the Christmas holidays for example) will be at a lower weekly rate (some pro rata calculation based on £89.62). If I don't claim WTC at all during the year, they will bill me next year for the overpayments...

Is that it?

[edit: sorry, I replied before your edit! Will get to work my calculator now!]

David333

Plugged the figures in and it seems to me that we will get the maximum amount judging by those forms, but because it is based on last year's earnings. What I don't fully understand is how the system deals with people who move between full-time work and part-time work in the current tax year. I understand that you can only get WTC when you're in full-time work but I don't understand how the system works out how much to give you when everything seems to be based on last year's income!

I assume that I am right above in terms of after my first period of work this tax year the system will start modulating payments when I next go into work or bill me at the end of the year...

enabledebra

David333 wrote: »

I should get:-

£1,920 - Basic; £1,950 - couples; £790 - thirty hour element. yes- not checked the 12/13 figures though

That is: £36.92 a week, basic; £37.50, couples, and £15.20 - thirty hour element. yes as above

In total, the maximum we are entitled to each week is £89.62. yes- as above but only for each week working over 30 hours

Our income last year and this year is low enough that we will get that maximum from last week when I started work until the end of September when I am not longer working full-time (nine weeks at £89.62 a week = £806.58). yes- again not done the maths

Then they will continue to pay us £89.62 for a further four weeks after I have stopped working (a further £358.42) yes

At that point things become murky. Because I am not working full time for twelve months they will realise that they have been overpaying me for the months of August, September and October. no, you haven't been overpaid- you've been paid 1/12th of a full annual entitlement x 3 for each month- exactly what you are entitled to. Therefore, any future WTC payments this tax year (when I work full-time again in the Christmas holidays for example) will be at a lower weekly rate (some pro rata calculation based on £89.62). no, if you have only recieved 3/12ths for the 2 months of work and 1 month 'run on' you have not over used your pro rata entitlement. If I don't claim WTC at all during the year, they will bill me next year for the overpayments...no - not unless the payments extended beyond the period of entitlement or your annual income estimate turned out to be incorrect.


Is that it?

if your annual award is based on correct income http://www.hmrc.gov.uk/taxcredits/keep-up-to-date/changes-affect/income-changes.htm

and you tell them -and they act to amend payments-straight away when you stop/start working the correct hours there should be no under/over payment and you would recieve only the correct fraction of the standard annual tax credits for someone with your annual income.

nb It was always a stupid system and seemed to assume everyone worked on an annual budget and could wait for underpayments to be paid after April and had reserves to repay any underpayment- talk about out of touch politicians. The way around this is to keep them updated or all changes in income and hours.