The £25 k disregard

manicstreetpreacher

Could some kind soul please enlighten me as to how this works? Does it mean that you can earn £25 k more and your award is unaffected? If so, where is the catch? I just don't get it.

petercarots

The way it works is that you can earn up to 25k more than you earned in the previous tax year, and so long as you dont earn more than that, then your payments wont change</p>So, say your 06-07 income was 10k, this means you can earn up to 35k in 07-08 before it would affect your payments
However, if your income was to go down then back up then you could be overpaid, as anything between the the lower figure you quoted and the figure you earned last year would be an overpayment
S0, say your 06-07 income was 10k, then you estimated that your 07-08 income would be 7k, (then your rate of pay would be increased to the level somone on a 7k income could expect) but then you reported that your 07-08 income was actually 15k. The extra money between 7k and 10k would then be overpaid, but the bit between 10k and 15k would not, as this would be under the 35k increase that you are allowed.
If your income did increase to 35k, then when it came to assessing your intial award for the next year, this is what your award would then be based on.

Its fairly simple once you understand it, but its a nightmare to explain, hopefully I've done an ok job here but if you've any further question just let me know and I'll try and give better answers!