critical illness payout, will this affect my tax credits?

berty9381

hi my husband has been diagnosed with MS, we have just had a critical illness payout and im just wondering what effect this will have on my benefits? i currently get child tax and my husband gets working tax. do we need to declare this to the tax credits?

Darksparkle

My understanding is that these payouts are non taxable therefore you wouldn’t declare it to tax credits.

McKneff

Check with hmrc. Dont rely on randon answers on here .

marliepanda

McKneff wrote: »

Check with Dwp. Dont rely on randon answers on here .

DWP Won't be very helpful. HMRC might be best...

Darksparkle

McKneff wrote: »

Check with Dwp. Dont rely on randon answers on here .

Be as well just shutting down this forum then.

Alice_Holt

In my experience Darksparkle does not do "randon answers" (or even random answers!

She gives very helpful and considered answers (correctly spelt).

Certainly OP please don't take up McKneff's suggestion of contacting the DWP!!

For Tax Credits there is no capital limit so the value of any savings/capital is ignored. However, any taxable income (over £300) from savings and investments is taken into account as investment income.

This may be helpful:
https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/what-is-income/investment-income/

You may wish to check with HMRC (not the DWP) if any interest income resulting from the critical illness payout can be disregarded for Tax Credits.

Darksparkle

Alice_Holt wrote: »

In my experience Darksparkle does not do "randon answers" (or even random answers!

She gives very helpful and considered answers (correctly spelt).

Certainly OP please don't take up McKneff's suggestion of contacting the DWP!!

For Tax Credits there is no capital limit so the value of any savings/capital is ignored. However, any taxable income (over £300) from savings and investments is taken into account as investment income.

This may be helpful:
https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/what-is-income/investment-income/

You may wish to check with HMRC (not the DWP) if any interest income resulting from the critical illness payout can be disregarded for Tax Credits.

Thank you Alice.

McKneff

Sorry Op.
Obviously i made a mistake and i have rectified it .

Senior moment.

marliepanda

I don't think McKneff was being flippant about the advice given on this forum, rather making sure people check with the (correct!) body as well.

Whilst DarkSparkle usually gives fantastic advice, if there is a mistake in the advice given, either of her own making or due to inaccurate info in the OP, saying 'oh well someone on a forum said it was okay so I assumed it was' won't help.

PersianCatLady

berty9381 wrote: »

hi my husband has been diagnosed with MS, we have just had a critical illness payout and im just wondering what effect this will have on my benefits? i currently get child tax and my husband gets working tax. do we need to declare this to the tax credits?

If neither you nor your husband will be working after the CI payment then I would have thought that the WTC will stop as well.