Reduced working hours how will it affect my working tax credits.

ultimatetodd75

I am currently working 37.5 hour week on little more than minimum wage We are claiming working tax and child tax credits. My wife isn't in work as we have no one to look after the kids if she did. We have been asked at work to reduce reduce or hours to 30. I have been told by another staff member that my tax credits will increase and cover the reduced wage. Is this correct? as if the tax credits don't increase we will not have sufficient income to cover our mortgage and other bills.

Icequeen99

ultimatetodd75 wrote: »

I am currently working 37.5 hour week on little more than minimum wage We are claiming working tax and child tax credits. My wife isn't in work as we have no one to look after the kids if she did. We have been asked at work to reduce reduce or hours to 30. I have been told by another staff member that my tax credits will increase and cover the reduced wage. Is this correct? as if the tax credits don't increase we will not have sufficient income to cover our mortgage and other bills.

Your tax credits entitlement in terms of the elements won't change if you drop to 30. If you drop below 30 (i.e. 29) you will lose the 30 hour element.

However, tax credits won't increase immediately to cover the drop in wage as the first £2,500 of any fall is disregarded. So it will be April 14 by the time they fully reflect the fall in income.

IQ

ultimatetodd75

Thanks for your reply.So basically however I look at it I am going to loose a big chunk of income. Approx £160.00 per month by reducing my hours. This is something We as a family can't afford. We are only just getting by on my current wage. Looks like its time to start job hunting.

Icequeen99

ultimatetodd75 wrote: »

Thanks for your reply.So basically however I look at it I am going to loose a big chunk of income. Approx £160.00 per month by reducing my hours. This is something We as a family can't afford. We are only just getting by on my current wage. Looks like its time to start job hunting.

You might be able to claim other benefits (housing benefit/council tax benefit).

The tax credits will catch up, but it won't be for some time unfortunately.

IQ

ultimatetodd75

That's my main worries. The time it takes the tax credit to increase. I am going to be really struggling won't be earning enough to pay the bills. Can't see me getting housing benefit when i own the property. And pretty sure we don't qualify for council tax benefit either (my wife worked in the council tax department before the kids were Born).

FBaby

If it means you work 4 days rather than 5, could your wife look for a few hours work on that day and maybe week-end?

ultimatetodd75

FBaby wrote: »

If it means you work 4 days rather than 5, could your wife look for a few hours work on that day and maybe week-end?

I work every other weekend so it would be difficult to find something to fit those times. I also think my work days will vary each week depending on what work is in.

Spendless

What about evening work for your wife? Supermarket, bar-work?

chelle_bell

Its all a bit of a confusion just now with regards to tax credits ect, with the universal credits system coming in.

If you earn under 11k (approx) a year, you will need to look for futher employment.

ultimatetodd75

Confusing you can say that again. All I know is we have been asked to drop a day. Don't know if it will be long term or just a few weeks or months. Not even been told when it will take affect or if the reduced hours are compulsory. The announcement was made the day before the manager went on holiday.

charlotte4940

i would wait to you renew. fill in the form for the tax year 12-13 as usual then when you get your tax credit award letter call them and tell them that your hours have dropped and so has your income. they will be able to calculate you entitlement off this years income so make sure you work out what your will earn for 13-14 before you ring them. We did this last year as our income and hours changed.