Tax credits and reducing working hours?

MrsE_2

princessdon wrote: »

Lets be fair here, 37 to 30 hours - plus another adult working FT is hardly less part time. They also have very young children.

My apologies to the OP, I read it as working 30 hours now.

Strange to want to cut hours/wages when childcare won't be lowered.

My dd is being made redundant next year & can only consider applying for jobs with less than full time hours (as she currently works) if it works out she can reduce her childcare costs. But they don't get tax credits or childcare help.

princessdon

They have to pay 75% minimum of the childcare though - so if they *could* drop they would.

However, I struggle with the "will TC make up the shortfall" issue - either working FT is too much - and I do sympathise with FT working parents or it isn't, whether the tax payer will pay I always find strange, but I suspect that is because I have never been affected.

I *suspect* and sorry if this is wrong OP = They are wanting maybe an hour to two to be able to do housework, shop etc without LO.

I had to pay for 3 days childcare when I worked 2.5 days - as the pm cut off was 12.30pm and so was my half day. I have to be honest I really appreciated going to the gym, doing the shop before picking up the kids. but I didn't get a penny towards this, even if I did get 25% I'd still do it, because it needs paying anyway.

caz246

We won't get any help with childcare next year. We are just now as our income was so low last year. Tax credits underpaid us quite considerably hence why we get so much at the moment. It's money we are entitled to. I had never claimed a benefit til my son was born. I have worked full time since I left school.

I am only looking for advice to consider my options. My son is currently in nursery for 10 hours per day and reducing my hours would mean an extra hour and a half with him each day. I hate that I am away from him so long. I may be reducing my hours but I commute and still have 2 hours travelling each day so it's not exactly part time. I have looked into the option of a transfer to be nearer to home but unfortunately there's no vacancies near me. I am not looking to make up the shortfall, I know how much I am going to lose each month and I am prepared to sacrifice that to spend more time with my son and still provide a good life for him.

caz246

repeatoffender wrote: »

Will you not have to repay the 575 anyway as don't the rules say you can only earn 10k more before they take the money back. I'm no expert tho I know childcare is expensive but I'm sure if you ask users on here they could help you save the 575 on other things over the year.

I'm not sure what you mean? I'm not aware of us having to pay it back. Maybe someone with more knowledge can shed some light. I had hoped I'd reserached it all enough befoe I went back to work. all so confusing.

Icequeen99

caz246 wrote: »

2010/11 joint income was approx £32000
2011/12 income approx £9000 (already deducted 37 weeks at £100 for maternity. I was on maternity leave and partner out of work nearly the full tax year)
2012/2013 income approx £33000, this would reduce to approx £30000 if I reduced my hours.

Our childcare is £820 per month (we have one child). At the moment we get around £575 tax credits purely because our income was so low last year, we will get next to nothing next year I am fully aware of this. Some of this is part of an underpayment from last year which they are spreading throughout the year.

These are all approx figures from the top of my head, I have all my paperwork if more accurate ones are needed.

Much appreciated

First, have you told HMRC your estimated income for 12/13 is 33,000. If you haven't, then you need to as soon as possible as you are being overpaid. Tax credits are based on previous year income unless your income rises by more than 10,000 in which case it is based on current year less 10,000. So in your case, tax credits for 12/13 should be based on 23,000 (not 9,000).

On that basis, the fall in income will be taken into account fully, so if you estimate 30,000 they should use 20,000.

Whether you will actually see a physical change depends on what they are paying you on right now. If they are used last year's income of 9,000, the 3,500 fall isn't going to make any difference.

If they are paying you using your 33,000 estimate (so 23,000 due to the disregard) then if you estimate 30,000 you will see a change to your tax credits.

Hope that makes sense.

IQ

caz246

Icequeen99 wrote: »

First, have you told HMRC your estimated income for 12/13 is 33,000. If you haven't, then you need to as soon as possible as you are being overpaid. Tax credits are based on previous year income unless your income rises by more than 10,000 in which case it is based on current year less 10,000. So in your case, tax credits for 12/13 should be based on 23,000 (not 9,000).

On that basis, the fall in income will be taken into account fully, so if you estimate 30,000 they should use 20,000.

Whether you will actually see a physical change depends on what they are paying you on right now. If they are used last year's income of 9,000, the 3,500 fall isn't going to make any difference.

If they are paying you using your 33,000 estimate (so 23,000 due to the disregard) then if you estimate 30,000 you will see a change to your tax credits.

Hope that makes sense.

IQ

Hi Icequeen thanks for your reply.

Tax credits have our estimated figure of £33000, we were already being overpaid slightly with provisional payments whilst we waited on our renewal and I gave them that figure when I renewed so I am assuming we are now being paid correctly? Our income has increased by more than £10000 so we should be getting paid based on £23,000.

Icequeen99

caz246 wrote: »

Hi Icequeen thanks for your reply.

Tax credits have our estimated figure of £33000, we were already being overpaid slightly with provisional payments whilst we waited on our renewal and I gave them that figure when I renewed so I am assuming we are now being paid correctly? Our income has increased by more than £10000 so we should be getting paid based on £23,000.

In that case, if you tell them the estimate is now 30,000 you should see a change in your tax credits of about £1435 over the year. Without knowing the full detail of your claim though it is hard to say exactly.

However, if your estimate turns out to be too low (for some reason say you earn a bit more) then you will also have an overpayment.

IQ

repeatoffender

Gosh caz they are long hours it must be very hard for you. Why dont you go to an advice centre and ask for some calculations you may not be much worse off not working by the time you take off your childcare and travel costs and your tax credits increase. Then maybe you can look at other money making / saving ways to help boost your income.

Dognobs

repeatoffender wrote: »

Gosh caz they are long hours it must be very hard for you. Why dont you go to an advice centre and ask for some calculations you may not be much worse off not working by the time you take off your childcare and travel costs and your tax credits increase. Then maybe you can look at other money making / saving ways to help boost your income.

People do this everyday week in week out to make ends meet, People should not expect taxpayers to pay because they need a little rest!

repeatoffender

[STRIKE]Dogs[/STRIKE]nob, you really should let all of that bitterness go and save your energy to work 12 hours a day and look after your family.