Is a 2nd job worth it?

agarr

Hi all,

I am currently employed full time and am a single mum of 1. In the last year I have seen my total tax credits cut in half (Probably in preparation for universal credit) but obviously nothing gets cheaper so to top up my monthly pennies I was going to look for a Sunday job temporarily to see me through a few months and there are seasonal jobs about but I was worried about how this will affect the tax credits.
I have read that for every extra £1 I earn, my working tax credit will be reduced by 41p but that also applies to my child tax credit. So considering I pay tax on my earnings will I be losing out by taking a 6 hour per week seasonal job?

Obviously I'd expect some reduction in benefits but it appears that I'd be losing a lot more than I'd earn, do I have this wrong?

calcotti

Changes to your tax credits are nothing to do with Universal Credit.

your Tax Credit award is usually based on last year’s income so your tax credits in 2017-2018 were based on your income in 2016-2017, your tax credits now are based on your income in 2017-2018. If your income changes from year to year your tax credits will change.

If you do extra work now this will increase your 2018-2019 income which will reduce your tax credits in 2019-2020.

The above rules are the general rules. However if your income in any year changes by more than £2,500 then the current year income is used instead of the previous year income.

When calculating your tax credits they are not both reduced at the same time. You have a total tax credit award which is reduced by your earnings. First your WTC are reduced and if these disappear your CTC arethen reduced.