New baby, Tax credits - Worried sick.

AutumnMoon

Hi, i'm posting this on behalf of my best friend as she has asked me for advice and I don't know what to tell her as it seems to have changed since my Daughter was a baby.

My friend gave birth at end of December, she's on her own, Dad not involved. She has claimed for tax credits and has had the decision in the post. She is worried sick as after doing the calculations she simply can't survive. Please can anyone advise?

They have used her income from April 2013-April 2014 which was £18,780. They told her that from now until April 2015 she will receive £329 child tax credit. Her maternity pay is £138 per week (Not sure if she means her maternity pay will go down to this after a couple of months, or whether she means this is what it is now)

They have based her child tax credit award from April 2015-April 2016 on £20,000 and she will then receive £219 per month from April 2015. Where do they pluck this figure from? Am I correct in thinking she will ring them in April with her actual 2014-2015 earnings and they will then re-adjust and base it on that?

The problem is, she cannot return to her previous job role unless she goes back 5 days per week (Working until 11pm at night) She cannot do this for obvious childcare reasons, so will be going back to a different role 3 days per week at minimum wage. She goes back to work in October.

From what her award notice says, she is not entitled to working tax credit. She has no idea how the hell she will put her little one in nursery from October. She has no family to help with childcare either.

Surely this can't be right? Is she supposed to live on just that bit of child tax credit from now until April 2016? When is she able to ring tax credits and inform them that her wages will now only be £150 per week? Would this be in October and then they will start giving her working tax credit then?

She is also concerned that they have estimated her income from 2014-2015 to be £20,000. She will not be able to live on £138 a week maternity allowance and £219 per month child tax credits.

Any help greatly appreciated. She is worried sick and it's the last thing she needs whilst trying to care for a newborn.

AutumnMoon

Thank you for replying.

Not sure whether she has given an estimate, I assume she hasn't as she doesn't know the first thing about how it all works, but i've just text her to check.

When you say she'll be entitled to claim childcare costs, she needs to be in receipt of WTC to claim this, doesn't she? So, does it all depend on what her income is for 2014-2015? I assume she needs to have earned quite a lot less than the previous year's £18,780 to qualify.

Without WTC, how will she afford to put her child in nursery from October? I was hoping she could ring them and tell them that from October she'll be working 24 hours x minimum wage and they would then start paying her WTC from October? Is this incorrect?

AutumnMoon

Thank again.

When should she phone them to tell them about her change in income? Now? Or is she not able to until April?

She is currently get 90% of her usual weekly wage, but in two weeks will start to get £138 per week instead.

She thinks her April 2014 to April 2015 wage will be approx £18,000 maybe a little less.

Caz3121

AutumnMoon wrote: »

They have used her income from April 2013-April 2014 which was £18,780.

AutumnMoon wrote: »

She thinks her April 2014 to April 2015 wage will be approx £18,000 maybe a little less.

the current award for 14/15 will remain as is, unless her actual income will be under £16,280 (due to the £2,500 disregard)

AutumnMoon

Again, thanks for the replies.

So her award will stay the same until this April, then she can call them with an estimate of April 2015-2016 and they'll base this year's award on that, rather than her actual income from 2014-2015?

AutumnMoon

Her 2015-2016 income will decrease by far more than £2500 as she'll be on maternity leave April 2015-October 2015, then from October 2015 onwards she will be working 24 hours a week & earning £156 per week. So in this instance would it be sensible for her to call tax credits & ask her to base the figures on this?

cte1111

The best thing to do is help your friend work out exactly how much she will earn this year, e.g. from 6th April 2014 - 5th April 2015. She will need to have all her wage slips and information about what maternity pay / allowance she is receiving now. This information can then be given to the tax credits people to recalculate the claim for this tax year. She needs to have the total before and after she went on mat leave separate, as there is a disregard for some of the maternity income.

Does she know definitely what hours she will be doing and when she will be returning to work? If so, then again she should be able to work out exactly how much her income for 2015-16 will be.