We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Wound-up pension lump sum, causes overpayment on Child Tax Credit!
Comments
-
I didn't have the option to leave it, I did have the option to transfer it to my own scheme of choice or lump sum.
I enjoyed my 9k, paid of some student debt. It is a windfall, but it is earned. The 1.5k is being extracted from me by the HMRC.
Exactly- transfer to a pension (untouchable) or have it as cash - same as wages.
you chose this and as such your benefits are lowered.
That is why people who work overtime get benefits lowered. You had more money, you get less benefits. Seems simple to me. Then again - I don't get Tax Credits as I pay for my children.0 -
I am unhappy that what amounts to pension savings made in years when my salary was much lower than the threshold would then count towards boosting me over the threshold and even worse to then owe money from that point forth.
so keep it as pension - If you have been given bad financial advice take it up with them. I do appreciate where you are coming from (I genuinely do) but your anger should be at the decision NOT to transfer to a pension, not the DWP.0 -
princessdon wrote: »So why do you want benefits? if you were unemployed and other benfits would you expect them to ignore it?
Tax credits ARE benefits - given to those that cannot support their own children. You are deemed for 12 months (it won't count next year) as being able to pay for your own children (ie not me paying for them). That is the case and is right, so why do you feel it is wrong?
Or do you feel I should continue to support and feed your children even with your extra cash?
Not being harsh by the way (I get you paid into this) just giving you the governments point of view). Fact is - I am paying in part to feed your children, you have money so the govt say, no he pays for his own children.
Hi, no I dont want the benefit. My salary is through the threshold. I am more than happy it should stop when the lumpsum arrived. It doesn't seem right that they then extract 1.5k from you from that day forth. The payments were valid in that year until the lumpsum appeared. If it had appeared in the final months of the year, the retracted amount would have been even higher.“Nobody ever defended anything successfully, there is only attack and attack and attack some more.”
SAF...ok G. Patton
"If a man does his best, what else is there?"
G. Patton0 -
Tax credits are for a year though (April to April) not the months that income arose.
Eg 2 years ago my OH was made redundant. The TC people said - income over the year was above limits. They left our family with a part time wage (and nothing else) to pay for a mortage (£1500 pm) and other expenses.
Was it fair (no - and that is where I see where you come from when so many don't pay a penny in income tax), but I can't change that. They look anually - right or wrong (and yes In My ipinion it's wrong), it is the way it is. I can't change this opinon other than sympathy worth zero. Sorry wish I could!0 -
princessdon wrote: »Exactly- transfer to a pension (untouchable) or have it as cash - same as wages.
you chose this and as such your benefits are lowered.
That is why people who work overtime get benefits lowered. You had more money, you get less benefits. Seems simple to me. Then again - I don't get Tax Credits as I pay for my children.
That comes across as quite condescending? I pay for my children too. What was that about?
I am very happy they lowered my child tax credit (not child benefit) but why pursue payments to date that they have made pro rata?“Nobody ever defended anything successfully, there is only attack and attack and attack some more.”
SAF...ok G. Patton
"If a man does his best, what else is there?"
G. Patton0 -
princessdon wrote: »Tax credits are for a year though (April to April) not the months that income arose.
Eg 2 years ago my OH was made redundant. The TC people said - income over the year was above limits. They left our family with a part time wage (and nothing else) to pay for a mortage (£1500 pm) and other expenses.
Was it fair (no - and that is where I see where you come from when so many don't pay a penny in income tax), but I can't change that. They look anually - right or wrong (and yes In My ipinion it's wrong), it is the way it is. I can't change this opinon other than sympathy worth zero. Sorry wish I could!
Crossed responses there. Yeah thats what I mean. Its the weirdest system. I am above the threshold and the expensiveness of life is relative. Houses are not getting cheaper etc. Oh well its getting paid back.
BTW experienced similar events to yours in past years too, dropping to one income and having past salary accounted for. More evidence of its weird design. Damned if it goes up and damned if it goes down anywhere within the window.“Nobody ever defended anything successfully, there is only attack and attack and attack some more.”
SAF...ok G. Patton
"If a man does his best, what else is there?"
G. Patton0 -
Hi, no I dont want the benefit. My salary is through the threshold. I am more than happy it should stop when the lumpsum arrived. It doesn't seem right that they then extract 1.5k from you from that day forth. The payments were valid in that year until the lumpsum appeared. If it had appeared in the final months of the year, the retracted amount would have been even higher.
Ah, ok. The issue is one that causes many problems with overpayments. Tax credits are an annual benefit. Payments are made from April on an estimate of what your income will be in the coming tax year (usually based on what it was the year before) so unexpected increases to that estimate cause overpayments. It was always the biggest flaw in the system and they tried many things to correct it (including ignoring the first £25k increase in income from the previous year at one point)
Which tax year was the overpayment and what was your income the year before that?0 -
BT phased out the final salary pension for the one I was on, and then phased that out for an even more cost effective one for themselves. Winding it up. Presumably ongoing employees got the chance to join the new scheme.
Paddedjohn, I no longer work for them and as my pension contributions were less then 3 years I got the chance to take the lump sum.
i assume you got the chance of a lump some as it was under 18k0 -
princessdon wrote: »so keep it as pension - If you have been given bad financial advice take it up with them. I do appreciate where you are coming from (I genuinely do) but your anger should be at the decision NOT to transfer to a pension, not the DWP.
I hear ya on financial advice (oops). Not angry, just dismayed. Onwards though
“Nobody ever defended anything successfully, there is only attack and attack and attack some more.”
SAF...ok G. Patton
"If a man does his best, what else is there?"
G. Patton0 -
Crossed responses there. Yeah thats what I mean. Its the weirdest system. I am above the threshold and the expensiveness of life is relative. Houses are not getting cheaper etc. Oh well its getting paid back.
I agree with you (what happened across the year isn't the same as here and now). I think it's wrong. Things change month to month and we don't have crystal balls to look at the future and think, oh I'll be made redundant, get a bonus, get a pay rise, cash in a pension so I will save XX just in case).
I wish I could better advice, but they look annually and that it the way it is. Sorry you lost so much of your pension - and could have transferred, it really is a bummer. Look at the lump sum gained and it's benefits not those lost as there is no alternative for sanity really and good luck0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.5K Banking & Borrowing
- 253.7K Reduce Debt & Boost Income
- 454.5K Spending & Discounts
- 245.6K Work, Benefits & Business
- 601.5K Mortgages, Homes & Bills
- 177.7K Life & Family
- 259.5K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards