Bonus - Tax Credits/HB

alistar

Good afternoon,

I am hoping someone can help me. I have spent a few hours trying to find the answers I need on-line but having no luck.

Here is my situation:

I work 35 hours a week. Single with two children aged 12 and 8.
Last years income was £20,500
This years income is £23,000
I claim tax credits and a small amount of housing benefit (this is due to currently paying back an overpayment on my tax credits - I don't think I would be getting this housing benefit if my tax credits were at their full amount)

I have just been told that there is a good chance I will receive a large bonus from work - up to about £7,000. I understand that I will need to inform the tax credits immediately.

Am I correct in thinking that my tax credits will then stop/reduce dramatically until the new tax year. After this point my expected annual income for 2015/2016 will then revert back to £23,000 and my new tax credits award will be based on the CYI for that year?

Also, with Housing Benefit, if I send my payslips for the next few months, my HB will cease for a good few months and then I will be eligible again?

I just want to be fully aware on the implications of this bonus to ensure that I have enough money to cover myself when tax credits and HB drop.

I hope that makes sense and I hope someone can help me.

Many thanks A*

alistar

Many thanks blondebubbles. That's what I thought the case would be regarding the tax credits - the whole "disregard" situation confuses me. Just when I think i've got a good understanding on it, I read something else that sets me back.

Housing_Benefit_Officer

You need to declare it when you receive it.

They will do one of two things.

Either treat it as a one off payment or if you receive it every year - spread the bonus over 12 months.