Wound-up pension lump sum, causes overpayment on Child Tax Credit!

QBSBuck

enabledebra wrote: »

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?

In the 2011-12 year. Income was 32k. The 9k squeezed me over. Picked up a promotion, so now I am over (even when the increased salary is averaged across the year). Like was said above I should have researched the implications more thoroughly, rather than fall foul to the system.

QBSBuck

princessdon wrote: »

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 luck

Thanks, come back in two months and I'll tell ya if I'm happy. House move pending. Uncertainty makes me uneasy

princessdon

QBSBuck wrote: »

In the 2011-12 year. Income was 32k. The 9k squeezed me over. Picked up a promotion up, so now I am over (even when the increased salary is averaged across the year now).

I do think it stinks, you work hard, pay your taxes and this was in effect "savings for your retirement" but .... if you had savings (ie saved your pension) even if you had 100K or more in savings at present it wouldn't be considered.

enabledebra

QBSBuck wrote: »

In the 2011-12 year. Income was 32k. The 9k squeezed me over. Picked up a promotion up, so now I am over (even when the increased salary is averaged across the year now).

The income increase disregard in 11/12 was £10k so if your income in 11/12 was less than £10k higher than your 10/11 income on it shouldn't have affected your award. Check your paperwork. (if you asked them to base your 11/12 award on a figure different to your 10/11 earnings my info would need to be revised)

QBSBuck

enabledebra wrote: »

The income increase disregard in 11/12 was £10k so if your income in 11/12 was less than £10k higher than your 10/11 income on it shouldn't have affected your award. Check your paperwork. (if you asked them to base your 11/12 award on a figure different to your 10/11 earnings my info would need to be revised)

My recalled figures were out further up. At the time I got the lumpsum, salary was heading for 34k. Promotion ended up bringing me up to 39k salary (add in the lumpsum to 48k). Previous years salary 33k. Blows the 10k.

enabledebra

Sorry missed the figures- not much to be done in that case I'm afraid- swings and roundabouts really.