Child Tax Credits & Leaving employment

partridge_pie

Hello

Just playing around with ideas.

I am considering giving notice on my full time job.

Will have £30000 in savings and a small pension of £4600 per annum

Currently I earn £21000 per annum and receive approximately £200 every 4 weeks in child tax credit as I am a single parent with one 12 year old child.

Any ideas how leaving employment would impact on my child tax credits?

Will they stay the same or change?

Thanks

calcotti

Use a benefits calculator https://www.entitledto.co.uk/

partridge_pie

Just thought. I am due a pension lump sum payment tax free of £30000 end of this month.

Is that counted as income for this year?

Thanks

calcotti

partridge_pie wrote: »

Just thought. I am due a pension lump sum payment tax free of £30000 end of this month.

Is that counted as income for this year?

Thanks

The tax free part of any pension payment is not counted as income for Tax Credits, any taxable part is counted. If the sum you refer to is entirely the tax free lump sum then it does not count.

See https://www.litrg.org.uk/tax-guides/pensioners/what-tax-position-when-i-take-money-my-pension-flexibly (towards the bottom of the page).

As capital it is also ignored for tax credit purposes but you will have to declare any future interest you receive from investing it.

partridge_pie

Thank you for that advice. That's a relief!

calcotti

Should also have said that in respect of any interest earned there is a disregard of £300.

Note also that the £30,000 will exclude you from entitlement to any other means tested benefits you are receiving such as Housing Benefit or Council Tax Reduction.

partridge_pie

Thanks. I do not claim Council Tax Reduction or any other benefit apart from Child Benefit so nothing to lose there.