Tax credits and child maintenance question

EJay_2

Hi All,

Yes, I'm a newbie and I have trawled the threads to find an answer but can't. Perhaps someone could either point me in the right direction or might take a bit of time to help me.

I'll begin.... my son used to live with me but now lives with his father. Since then I married and had a child. I work part time and have recently become part self employed. My income from employment is 300 a month and last year only 100 from self employment and as a result, my tax credits are high, we get £213 per week which includes the childcare element (I pay £70 per week for childcare for the time I work and understand that tax credits pay 70% of that). My husband is also self employed but for the last year had no income. My ex put in a claim with the CSA and it's come back stating that I contribute £35 a week for our child's upbringing. Apparently they take into account the 'income' from tax credits (which is high because we don't earn much) and even include the childcare element for my youngest in all of this which seems bizarre. I'm not sure what to do because we were struggling and eating into savings to a degree before this and now, I'm going to be faced with a bill for the months they've taken to work this out plus the ongoing 35 a week.

I have read, but don't know if this is true, that if my husband's income was greater than mine then I wouldn't be eligible for nearly as much in CSA contributions because he would be seen as the 'earner' of the tax credits - is this true?

Before this happened, it sometimes seemed as though I was working for very little gain once I'd taken out the cost of running my car etc, but now with the CSA bill, it will actually cost me to work. If I do give up my job though I'm faced with working less than 16 hours and so won't get tax credits unless I can build up the self employed side of things but this is not guaranteed work or income so it would be difficult to say with certainty that I could do this. Also, if my circumstances do change financially, how long is it before the CSA act upon this?

Any advice would be appreciated, I'm not looking to get out of paying for my son but this amount is totally unreasonable. His father is well off and has a well-paid job so it's not as if he's going without, which is more than I can say for my youngest child now.

Crellow4

Child Tax credits would be added to your income in any event, Working Tax credits are attributed to the higher earner. If you and your partner earned the same amount it would be split. Child Care tax credits are also taken into account. The rationale is that if you 'earned' all of your income you would be assessed on it, the fact that you claim some of it from the Government is neither here nor there.
When you are eventually assessed under 2012 rules your Tax a Credits will be ignored in full.
If you are both self employed and running at a loss would you not consider some sort of paid employment, even on a part time basis? If you partner is earning no money perhaps he could care for your child, thus removing the need for Child Care and consequently that element of the tax credit claim?
Changes of circumstances are dealt with by the CSA from the date you report them. Reassessments do often take a number of weeks to complete.