Is redundancy counted as income for Tax Credit?

dolphy

Hi, a friend of mine has just been given notice of redundancy.

Does anyone know if the redundancy pay (approx £6000) is counted as declarable income when tax credits are calculated?

I believe it isn't taxable but uncertain as to whether your tax credit payments are reduced as a result??

Thanks for any help.

Dolphy

carlos700

I would like to know the answer to this one as well anybody know???:rolleyes:

1956

hi
there are people on here who will answer you question more fully i suspect, but the short answer form my experience of 12 months ago is if you have any money savings, redundancy anything that accumulates to over £3k you are stuffed, for any social secury help other than basis unemployment. in fact you would be better arriving in this country under a truck rather than working all your life contributing to the system and saving as some do.! jmo, oh a quick call at the social securty office for the relevent leaflets with give more info and depressing reading,LOL
cheers dean.m

me bitter --NOOOO

dolphy

I agree Dean, the whole system needs a good sort out.

Apparantly, if you ask for holiday pay to be added onto the redundancy settlement, it isn't used in an assessment for Job Seekers Allowance. However, if you receive holiday pay as part of your last payslip, that is considered before they make any JS payment, i.e. your allowance is reduced or delayed until your pay has 'run out'.

They already receive child tax credits as a family but I think the rules for child tax are different to those of working tax credit, i.e. savings aren't means tested but you have to declare the amount of interest earned on them. Hence my query on the redundancy as being an 'income' in that tax year. You have to declare carers allowance apparantly so I bet that redundancy will fall into the same category.

Thanks for your input Dean.:beer:

Dolphy

catkin

Redundancy - under £30,000 isn't counted for tax credit purposes. If you get more than £30,000 you only have to declare the difference. Any interest gained on investment of any amount of redundancy is counted, but only after the first £300 (of interest). Hope this helps !

ellat257

I asked this question last year and was told that if it is a one off payment and not a regular amount it doesn't count for CTC. If it is for other benefits it counts towards savings. Either way declare it in writing and keep proof just in case! (I get very cynical when TCO are involved.)