Can I claim tax credits with mortgage paid off

italianie

I'm getting a redundancy payment in a few months which I'll use to pay off the small remaining mortgage.

As the lump sum is going on the mortgage, do I need to declare the redundancy payment when claiming working / child tax credit? Can't seem to find any info on this.

System

I would declare it just to be on the safe side. Might be counted as income or savings.

System

Oh sorry just seen youre paying it off the mortgage. I wouldnt declare it unless theres a specific question asking but then make them aware you no longer have the cash.

italianie

tessiesmummy wrote: »

Oh sorry just seen youre paying it off the mortgage. I wouldnt declare it unless theres a specific question asking but then make them aware you no longer have the cash.

Thanks yes I need to pay the mortgage as we will need to reduce outgoings on a single income and I won't be able to walk into the same pay after 16 years doing my job.

I don't feel I should declare it as it's redundancy money and it's going into bricks and mortar so it's not for all intensive purposes savings, but it will be paid on my final wage, so will look like income. We will need the support of tax credits to live off until I can find other work, going to be tight tight for a while!!

BorisThomson

The taxable element of your redundancy needs to be declared for tax credits. Also keep in mind that tax credits are based on your previous year's income, so you may well not be eligible.

If this is a new claim you'll need to check if you are in a universal credit area. The criteria is different for that and savings will affect your claim, even if you choose to use them to reduce your mortgage. You will also have no choice but to actively seek employment.