Confused re Tax Credit Award Letter

jeanniefaethecarse

Hi,

I'm a bit confused regarding the calculation of our family's tax credit award.

My husband earns £7800pa 40hrs per week (earns under minimum wage as he works for his family business)

I don't earn just now (lost my job earlier this year when my place of work went bust) but I'm retraining as a nurse in September. The nursing bursary is not counted as income.

So our only working income will be my husband's £7800. We have two dependent children.

When I phoned to renew I double checked that they knew I wouldn't be earning and would be doing the nursing degree and receiving a bursary for it.

Got my award letter today and they have based it on an income of £8026.20 for some reason rather than £7800.

When I went to check on entitled to, the calculation of tax credits on both £7800 and £8026.20 came out as nothing like what we have actually been awarded, and I can't see where they have got the actual award amount from.

The award for 2013/14 is

Working tax credit £3255.70 and child tax credit £5993.30 (for two children under 16- the eldest will be 16 in April 2014 but will be remaining at school).

The child element seems to be correct according to the calculator but not the working tax credit element.

Rather confused and wondered if someone could clarify in case there's a reasonable explanation before I go off and telephone them.
Many thanks- Jeannie

Icequeen99

Looks to me like the 30 hr element isn't included.

Near the back of your award page it should show you the elements. Should say WTC basic element 365 days, couple element, child element.

Can you tell us what it says on there and the figures next to it?

IQ

jeanniefaethecarse

Thank you Icequeen99
The working tax credit elements are:
From 6/4/2013 - 5/4/2014 (365 days) £1923.55
Second adult from (dates above) £1971.00
30 hour element (same dates above) £792.05
Total working tax credit elements £4686.60
Reduction due to your income £1430.90
Amount for the period £3255.70

Thank you again,
Jeannie

Icequeen99

jeanniefaethecarse wrote: »

Thank you Icequeen99
The working tax credit elements are:
From 6/4/2013 - 5/4/2014 (365 days) £1923.55
Second adult from (dates above) £1971.00
30 hour element (same dates above) £792.05
Total working tax credit elements £4686.60
Reduction due to your income £1430.90
Amount for the period £3255.70

Thank you again,
Jeannie

Ok, so the issue is with the reduction due to your income bit.

They are using an income of nearer 10,000.

What was your joint income for 12/13? (including your income for the time you worked).

IQ

jeanniefaethecarse

I earned £2100 in 2012/13 as a part time carer
My husband earned £7800,
so a total of £9100 for 2012/13

Thank you,
Jeannie

Icequeen99

jeanniefaethecarse wrote: »

I earned £2100 in 2012/13 as a part time carer
My husband earned £7800,
so a total of £9100 for 2012/13

Thank you,
Jeannie

So that is the income your 13/14 award will be based on even though your income has fallen.

This is because last year a new rule was introduced that meant the first £2,500 of any fall in income from one year to the next was disregarded.

So unless your income goes below £6600 (9500 minus 2500) your 2013/14 claim will not be recalculated. It will remain based on your your 12/13 income.

IQ

jeanniefaethecarse

Ah, I see.
Do you know, if there is there any way to request a recalculation or is any shortfall made up at the end of the year?
Many thanks
Jeannie

Icequeen99

jeanniefaethecarse wrote: »

Ah, I see.
Do you know, if there is there any way to request a recalculation or is any shortfall made up at the end of the year?
Many thanks
Jeannie

No. The rule is absolute. If your income doesn't fall my more than 2,500 from the previous year income then the legislation says that the claim must be calculated on previous year income.

The shortfall for 13/14 will not be made up.

From April 2014 you will see an increase in your tax credits as they will then use the £7800 previous year income of 13.14.

IQ

jeanniefaethecarse

Icequeen99 Thank you so much for all your help this morning. I really appreciate it.
- Jeannie