Child tax credit overpayment

Happydad_2

Hello all im new here, im hoping someone can help.

For ctc 2015/6 award my estimated income was £22,000 my actual income was £23,894 . Yesterdays payment went in the bank however it was half of what we normally recieve. They did not send us any notification of any change so it was a suprise. This was upsetting as we were relying on the normal amount. I rang them up and they said this was because our actual income was £23,894 so they were recovering payment from our new award of16/17 which will be recovered for a further 3 payments. Now what i dont understand is what about the income disregard of £2,500 my increase was less than £2,500 i did mention this on the phone however i was slightly confused with there explanation they did not seem to understand it themselves. Am i missing something have i got my boxers in a twist with the disregard. Thanks for your help.

Caz3121

what was your 14/15 income that your 15/16 award would initially have been based on?
If it was lower and you advised them of the £22k estimate, they would already have factored that in
eg 14/15 income £15k...advise estimate of £22k then award calculated on income of £17.5k (using the 5k disregard) with £23,894 actual, the award would have been based on £18,894 so there would be an overpayment
In this situation you would also see a reduction in this years payments as previous award based on £17.5k and this years will be based on £23,894
..sample numbers




corrected post as post 5 points out the correct numbers based on the changed disregard numbers

zagfles

The disregard applies to the difference between actual incomes from one tax year to the next. It does not apply to the difference between estimated and actual income, if that's what you were assuming. It can't do - because then people could gain by giving an low estimate!!

Darksparkle

The £2,500 also only applied to income from 2016/17 onwards.

The disregard for income increases from 2014/15 to 2015/16 was £5,000.

Darksparkle

Caz3121 wrote: »

what was your 14/15 income that your 15/16 award would initially have been based on?
If it was lower and you advised them of the £22k estimate, they would already have factored that in
eg 14/15 income £15k...advise estimate of £22k then award calculated on income of £19.5k (using the £2.5k disregard) with £23,894 actual, the award would have been based on £21,394 so there would be an overpayment
In this situation you would also see a reduction in this years payments as previous award based on £19.5k and this years will be based on £23,894
..sample numbers

If 2014/15 was £15,000 and 2015/16 was estimated as £22,000 then the claim would have been based on £17,000.

If the income for 2015/16 was then revised to £23,894 then the claim would have been recalculated on £18,894.