How Exactly do Working Tax Credits work?

fooby1

I'm bipolar and get DLA (middle care, lower mobility). I'm currently in full time 38 hours per week employment, but it's not working for me. Even with medication and great support, the type of work is very stressful and I'm having a lot of time off and having panic attacks at work, so I'm considering going part time 16-20 hours per week.

My issue is that whilst this would seriously improve my mental state, I'm worried about money. I currently make £1400 per month gross, which would be halved. I understand that I would be eligible for housing benefit which would take at least some of the rent costs away, but I don't understand WTC eligibility.

On the benefits calculator websites, they always ask me for my net earnings in the 16/17 tax year, which are roughly £6000 from work and around £600 from JSA while I was looking for my current job.

The calculators suggest that I am eligible for working tax credit if I cut my hours in half, but I'd really appreciate it if I could have some help understanding how previous earnings can effect my claim?

Thanks!

Darksparkle

Tax credits is based on your last tax year earnings unless your current tax year income increases/decreases by £2,500.

The calculate tax credits you’d need last year’s actual income and an estimate of this year’s income. You should only include contributions based JSA in your income, not income based.

fooby1

Thank you. Another question is regarding my girlfriend. She works full time and we have a joint tenancy on my home, but she no longer lives here. I assume that even though I pay 100% of the rent and bills, I'll need to get the tenancy changed to sole before I would classed as single in the eyes of the DWP? She also visits often, but doesn't contribute anything and we have no linked finances.

Darksparkle

For tax credits or housing benefit?

fooby1

For both. It's an odd one because she often stays over and has some belongings here, but has no link financially. She works a live in job and due to my illness, we found that living separately, at least for now, works well for us. I obviously don't want to end up in the case of paying back benefits because DWP sees us as living together, and she can't contribute financially as she has her own rent and bills to pay.