Help with tax credits and overtime!

Miroslav

bloolagoon wrote: »

Should that not be £3850'PLUS disability element (which isn't frozen)?

You can probably tell i've been left confused by all of this. I never knew how they worked out my WTC in the first place. I just accepted what they told me was right.

I currently earn approx £8,000 p/a and receive approx £69 p/w tax credits which includes the disability element, so approx £3588 p/a.

My understanding is I can earn £3850 per year before my tax credits are affected. Then, every £1 over £3850, I lose 48p in the £ of my tax credits, so with me aiming to earn £4150 over £3850, i'd lose 48% of my tax credits.

Or have I, as per usual, got it toally wrong?

bloolagoon

Miroslav wrote: »

You can probably tell i've been left confused by all of this. I never knew how they worked out my WTC in the first place. I just accepted what they told me was right.

I currently earn approx £8,000 p/a and receive approx £69 p/w tax credits which includes the disability element, so approx £3588 p/a.

My understanding is I can earn £3850 per year before my tax credits are affected. Then, every £1 over £3850, I lose 48p in the £ of my tax credits, so with me aiming to earn £4150 over £3850, i'd lose 48% of my tax credits.

Or have I, as per usual, got it toally wrong?

AIUI (no expert) the disability elements of WTC (£2970 basic plus £1275 severe disabled) are added to your basic allowance - the basic changes on things like couple / single etc)

Those allowances are still there and also will not be frozen.

bloolagoon

blondebubbles wrote: »

No. As mentioned earlier, the disability element is reduced by income just the same as the other elements.

Otherwise any disabled person could claim WTC disability element regardless of income.

I know it's reduced by income but still added to the amount before deductions isn't it? Ie the taper happens at a higher threshold.

Miroslav

blondebubbles wrote: »

Yes that is correct however it doesn't start until April 2016 which is 2016/17.

Assuming you work less than 30hrs and arent on the severe disability element, I'd estimate you'd get £56 per week.

So, when you say it doesn't start until April 2016, does that mean awards for 16/17 will be based on the higher threshold and we won't see the effects of the lower threshold until 17/18 or is it based on estimated earnings for 16/17 and we'll see cuts as of April 16?

bloolagoon wrote: »

AIUI (no expert) the disability elements of WTC (£2970 basic plus £1275 severe disabled) are added to your basic allowance - the basic changes on things like couple / single etc)

Those allowances are still there and also will not be frozen.

It would be nice if they only included the threshold as before any disability elements, but sadly I don't think so.

Miroslav

blondebubbles wrote: »

It will affect all payments from April 2016.

I thought so.

So how will overtime work? Will there be some kind of disregard? i.e If I do 50 hours overtime for the year, will I see all that 50 hours pay, or will I lose 48% of it in Tax Credits thus affecting 17/18 or meaning I have an overpayment?

Miroslav

blondebubbles wrote: »

The disregard next year will be £2500. That means in 2016/17 you can earn an extra £2500 from 2015/16 without being overpaid.

You'd then have your payments reduced from April 2017

Eg in 2015/16 you earn £8000 2016/17 you earn £10000.

Your 2016/17 claim will be paid based on £8000
Your 2017/18 claim will be paid based on £10000 (subject to your income for 2017/18).

Hmmmm, so it's not going to pay much to do any overtime if I lose it long term as I won't get to see all the money. I don't really want any anyway as it affects my health but have done some to help my company out. Had I been in good health, then it may be different.

Still 17/18 is some distance away and circumstances may change by then.

Miroslav

blondebubbles wrote: »

In my opinion, work as many hours as possible or you are capable of and get off tax credits.

Easier said than done I know but with how bad the system is getting, I wouldn't want anything to do with it.

I think working the hours I am capable of is the way to go but I won't push my health too far.

Starting from my next pay day on the 25th, i'm going to save my WTC and see how I survive with just my wages. I've already started changing the ways I do things and buy things, so maybe some good can come out of this. Not that I was a big spender before mind.