Tax credits, first payment

Nickynoo1

hi,
does anyone know why, when tax credits do the calculations and give a final figure they dont just split it equally between the payment schedule. Why do they always give a higher first payment followed by a lower amount each month.

My first payment for April was too high for my allowance for Council tax benefit, putting me out of benefit for 4 weeks, hence having to reclaim CTB once normal tax credits payments began. (And i'm not talking one off payments which are disregarded)

Its so annoying for my budget too. If anyone does know why they do that id be interested to hear.

Nickynoo1

CoopCooper

Right, this isn't easy but I hope I can explain this the best I can.

The answer to the first payment being higher is that it contains the 'rounded' amounts.

Say someones CTC for the year was £3400.

Work out a daily amount - 3400 / 366 (leap year) = 9.28961748633

That would be rounded down to £9.28 per day.
Then time seven equals £64.96 per week.

But, they're still entitle to that 0.00961748633 per day.
Multiply that by 366 gives you - £3.52

That amount would be added to the first week.

Therefore the first payment would be £64.96 + £3.52 = £68.48.
And then their weekly payment would be £64.96.

Phew, I need a beer now. :beer:

DazzerG

Plus the amount of any backdating that you may have been entitled to.