Income has dropped since getting work

Hermanji

Last year I received Tax Credits, Housing and Council Tax benefits due to a low income. In November my partner, who is a stay at home mum, had an opportunity to do some paid work using her skills. She worked an average of 8 hours a week and earned a modest but very useful £650. We did what we should and informed the Council and HMRC who duly altered our benefits and credits.

At the end of the financial year I have made a direct comparison of what we were getting before and after my partners new income (and there have been absolutely no other changes) and our benefits and credits have reduced by £725! That means her 100 hours of hard work have actually cost us £75!!! :huh:

How can this be? Is there an appeal to be made here? I've checked the figures HMRC and the Council have and they are correct...

HappyMJ

Hermanji wrote: »

Last year I received Tax Credits, Housing and Council Tax benefits due to a low income. In November my partner, who is a stay at home mum, had an opportunity to do some paid work using her skills. She worked an average of 8 hours a week and earned a modest but very useful £650. We did what we should and informed the Council and HMRC who duly altered our benefits and credits.

At the end of the financial year I have made a direct comparison of what we were getting before and after my partners new income (and there have been absolutely no other changes) and our benefits and credits have reduced by £725! That means her 100 hours of hard work have actually cost us £75!!! :huh:

How can this be? Is there an appeal to be made here? I've checked the figures HMRC and the Council have and they are correct...

Unfortunately that's what happens. There is very little incentive to do more hours as you lose 65% of housing benefit, 20% in council tax reduction and 41% of tax credits (you should then gain more housing benefit though to offset the reduction). Add them all up and it's almost 100% so it costs you to work or earn more.