Redundancy looms and tax credits

WOODY1_2

I am taking voluntary redundancy and am expecting a figure in the region of £40,000.

I have £50,000 and 10 years outstanding on our mortgage on a tracker rate of 1.34%.

I am hoping to work with my wife who is a self employed registered childminder.

We have no other debts but we do have two children, one 12 and one 6.

I would like to put the bulk of the money on the mortgage and just keep a small rainy day fund, will this be seen as deprivation of assets for tax credits purposes.

Also will the lump sum received alter this year's tax credit claim, we currently receive just under £200 per month.

Any help would be great.

Thanks

Woody

wintergirl

I can only answer with reference to a few years ago, when hubby got made redundant, and had a lump sum of around £12k in redundancy.
The redundancy amount is shown on your P45 / P60 for that year, included in the 'Gross Pay' figure.
We (rightly or wrongly) declared this as his pay when completely the next Child Tax Credits claim form, although did put a note in explaining that his salalry was overly high that year because of the redundancy pay out.
We had our tax credits stopped, and it took an age to sort it all out. In fact, by the time we'd cleared it up, hubby had got another job, and was earning too much to claim the credits anyway!

I would suggest trying to ring them, and see what they suggest in your situation. You don't have to say what you will do with the redundancy money, you just want to know if they need to be aware of it. It may be that we confused matters by declaring this redundancy when we shouldn't have done!