So confused about Tax credits...

Fiwifruit

Hi, Im looking for some advice regarding my Tax credits.

Im a stay at home parent to a 3 yr old and also due a baby within the next couple of days.

My partner works but recently had his hours cut (All staff in the store had their hours mixed about, not the best timing with me being pregnant) So now he is doing 28hours instead of 38 and we have lost quite allot of money and he is now earing around 10,500 a year at the moment.

I rang tax credits to inform them and for some reason our tax credits went down £69 in total each week. They said to avoid a over payment they over estimate what my partner earns. On my paperwork it says the ammount of earnings they use for my partner is £13,800 (or something along those lines)......He has never earned as much as this I rang and told him and said if we are entitled to more it will be sorted next April.

With my daughter due in a few days i did the tax credits calculation on hmrc website and it says we will get £79 a week once she is here.. We pay £800 in rent each month and we have loads of debt because we are so broke now the hours have been cut.

Is tax credits right with the £79 figure? if it is, We cant afford to live.


x

Pedent

I think you should get more than that. Hopefully someone else can check the figures and confirm.

Because of the fall in your partner's working hours, you no longer qualify for the 30 hour element of WTC which is worth £790, but you still qualify for the following elements:

WTC Basic Element: £1,920
WTC Couple and Lone Parent Element: £1,950
CTC Family Element: £545
CTC Child Element x 1: £2,690
= £7105 maximum entitlement

You said that they're using £13800 as your household income for the calculation. You lose 41% of any earnings over £6,420.

£13800 - £6420 = £7380 earnings over the threshold
£7380 x 41% = £3026 reduction in your award

£7105 maximum entitlement - £3026 reduction in your award = £4079 final award, or £78.23/week.

That's close enough to the £79/week figure that you were given to make it look like that figure is based on your current circumstances.

When you have a second child, you will qualify for a second child element, i.e. another £2690, or £51.59/week, taking your total entitlement up to £129.82/week.

But please do wait for someone else to confirm the figures before you take this as certain.

Pedent

The other mystery that would be good to clear up is how they calculate your household income to be £13800, when your partner only earns £10500.

Looking at this year as a whole, your partner will spend the remainder on £10500/year, but has already earned a higher income than that for some of it, so his total income for the year will be more than £10500.

The first £2500 of any fall in income is disregarded, so if your income was previously £13800, and has now fallen by less than £2500 to £11300+, then they would calculate this year's award for you based on an income of £13800.

The only problem with that as an explanation is that you say that your partner has never earned that much. Do HMRC have the right figure for your partner's earnings last year?

If that is the explanation, then the good news is that your partner's higher earnings at the start of the year and the disregard will only affect this year's award, so next year's award will be higher (and the following year's higher still).

zagfles

Calculations above look right. They should be using last year's income, or whatever you've estimated this year (subject to the disregard as above), where do they get the £13800 figure from, are you sure that wasn't last year's earnings?

BUT as well as tax credits you'll almost certainly be entitled to some housing benefit, possibly council tax benefit too. Check the entitledto calculator https://www.turn2us.entitledto.co.uk/entitlementcalculator.aspx

princessdon

That sounds wrong (as others have said) - carp timing indeed with your new baby on the way.

Is this temporary for him or will this always be the way?