Tax credits tablesv - which to use

phil001

Hi

My current situation is

I work 37hrs, wife works 21hrs a week.

2 children, 1 with childminder 2 1/2 days a week, the other full time primary school

My wife is considering cutting her hours to approx 10hrs a week.
So childcare hours would reduce to approx 2 half days a week, maybe a little more.

My question really, i'm trying to work out roughly what tax credits will change to, but i cant find the correct table for when both are working, but only 1 is working over 16hrs.
Can anyone advise which i should use?

Many thanks
Phil

Darksparkle

Use the one for working at least 16hrs but no childcare.

This is because you both must work at least 16hrs to claim childcare help (unless the one working less than 16hrs is incapacitated or on carers etc)

phil001

Darksparkle wrote: »

Use the one for working at least 16hrs but no childcare.

This is because you both must work at least 16hrs to claim childcare help (unless the one working less than 16hrs is incapacitated or on carers etc)

thank you very much.

Its such a nightmare trying to work out if you are going to be better/worse off when situations change

Darksparkle

The entitledto calculator is usually the best one to use as it covers most benefits.

Caz3121

phil001 wrote: »

My wife is considering cutting her hours to approx 10hrs a week.
So childcare hours would reduce to approx 2 half days a week, maybe a little more.

you would need to factor in paying the childcare yourselves or maybe via childcare vouchers if your employer offers these. Tax Credits will not contribute to the childcare costs unless you are both working over 16 hours

phil001

Darksparkle wrote: »

The entitledto calculator is usually the best one to use as it covers most benefits.

thanks, yes i used that when she started work earlier this year

phil001

Caz3121 wrote: »

you would need to factor in paying the childcare yourselves or maybe via childcare vouchers if your employer offers these. Tax Credits will not contribute to the childcare costs unless you are both working over 16 hours

yes, i realise we would have to pay ourselves, i do have access to vouchers at work though. do they work out at saving approx 30%?

thanks

phil001

im pretty sure we would be better off if she was not working at all than if she worked less than 16hrs due to childcare costs

Darksparkle

phil001 wrote: »

im pretty sure we would be better off if she was not working at all than if she worked less than 16hrs due to childcare costs

If you could give more specific details I could do some calculations for you?

Income before/after the changes. Childcare costs before and after.

Whether she is better off or not would really depend on what she earns I suppose.

For some there is no point, for others, they'd still have a good bit of their earnings left.

phil001

thanks
All figures approximate

I earn £24k
Wife earns £9600, and works 22 hrs a week.
Pay £80 a week for childcare currently
And we get around £315 a month tax credits currently.

IF she went ahead with the change i'd guess at
wife earning £4500, working 10 hrs a week.
£50 a week childcare

No savings to declare, no other benefits received other than child benefit. No disabilities etc

Anything else?

Thanks again!

Darksparkle

At present, she is better off working the hours she already does or dropping to 16hrs.

There is very little difference with working 10hrs or not working.

Scenario 1

Household income £33,600
Childcare £4160
Tax credits £2654

So income £33,600 - £4160 + £2654 = £32,094

Scenario 2

Household income £28,500
Childcare £2600
Tax Credits £1832

So income £28,500 - £2600 + £1832 = £27,732

Scenario 3 (if not working)

Household income £24,000
Childcare £0
Tax Credits £3677

So income £24,000 + £3677 = £27,677

Scenario 4 (if working 16hrs and childcare was £65 per week)

Household income £31,000
Childcare £3380
Tax Credits £2928

So income £31,000 - £3380 + £2928 = £30,548