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Friend claiming child tax credits

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Friend claiming child tax credits

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garmeggarmeg Forumite
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Friends of mine are receiving child tax credits, but not working tax credits as their income is too high. The amount is about £40 per week and they are 57 and 56 years old. Only one of them are in employment.

He is able to retire on a pension not dissimilar to his current salary and as he hates his job he is considering this.

Would they be able to keep receiving child tax credits or would they be forced to claim universal credit - which would be zero due to the tax free cash being in excess of £16,000 and so their capital would be too high. All their savings and investments are in cash ISAs, share ISAs and premium bonds which mean they are tax free and have no effect in tax credits. 

So an enforced move from tax credits to universal credit would cost them £2,000 a year approximately.

So, if he retires can they stay on child tax credits (which would only be for 5 years max anyway, given the age of the children - youngest is 13).

I have googled away and found nothing definitive just a "may" be switched to universal credit.

I know that they probably dont need the £2,000 tax credits but it is still a significant amount to lose. Working an extra year could pay for the loss of any future tax credits I guess, but that is a by-the-way.

Thanks

Replies

  • calcotticalcotti Forumite
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    Taking a pension is a change in his working status and income but doesn't require a new claim for Tax Credits so there shouldn't be any problem. Simply needs to confirm the change.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • Icequeen1Icequeen1 Forumite
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    calcotti said:
    Taking a pension is a change in his working status and income but doesn't require a new claim for Tax Credits so there shouldn't be any problem. Simply needs to confirm the change.
    As Calcotti says it isn't a change that triggers a UC claim, but the amount they get may be different. This year, because of the increase in WTC, without a change to the CTC threshold, it throws up some anomalies so it may be that they don't get as much CTC as a CTC only claim as they are getting now but it really depends on their income figures. 
  • edited 30 July at 12:09PM
    garmeggarmeg Forumite
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    edited 30 July at 12:09PM
    calcotti said:
    Taking a pension is a change in his working status and income but doesn't require a new claim for Tax Credits so there shouldn't be any problem. Simply needs to confirm the change.
    Icequeen1 said:
    As Calcotti says it isn't a change that triggers a UC claim, but the amount they get may be different. This year, because of the increase in WTC, without a change to the CTC threshold, it throws up some anomalies so it may be that they don't get as much CTC as a CTC only claim as they are getting now but it really depends on their income figures. 
    Thanks both, I will let them know. The legislation seems unclear.

    EDIT: I guess this scenario falls under ...

    Scenario
    You claim Tax Credit but your change of circumstances wouldn't have led to a claim for a new 'legacy benefit' (for example you have less income).

    Outcome
    You have a choice - remain on adjusted Tax Credit or claim Universal Credit if you will be better off.
  • edited 30 July at 12:32PM
    Icequeen1Icequeen1 Forumite
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    edited 30 July at 12:32PM
    garmeg said:
    calcotti said:
    Taking a pension is a change in his working status and income but doesn't require a new claim for Tax Credits so there shouldn't be any problem. Simply needs to confirm the change.
    Icequeen1 said:
    As Calcotti says it isn't a change that triggers a UC claim, but the amount they get may be different. This year, because of the increase in WTC, without a change to the CTC threshold, it throws up some anomalies so it may be that they don't get as much CTC as a CTC only claim as they are getting now but it really depends on their income figures. 
    Thanks both, I will let them know. The legislation seems unclear.

    EDIT: I guess this scenario falls under ...

    Scenario
    You claim Tax Credit but your change of circumstances wouldn't have led to a claim for a new 'legacy benefit' (for example you have less income).

    Outcome
    You have a choice - remain on adjusted Tax Credit or claim Universal Credit if you will be better off.
    The legislation isn't unclear it is just complicated. There isn't once piece of legislation that sets out that certain changes trigger a move from tax credits to UC. There are several bits of legislation that lead to that situation occuring in some cases. There is tax credit legislation that determines when a claim ends, then legislation covering when new tax credit claims can be made and legislation covering when UC claims can be made. Putting it all together answers the question you asked. 
  • calcotticalcotti Forumite
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    garmeg said: EDIT: I guess this scenario falls under ...

    Scenario
    You claim Tax Credit but your change of circumstances wouldn't have led to a claim for a new 'legacy benefit' (for example you have less income).

    Outcome
    You have a choice - remain on adjusted Tax Credit or claim Universal Credit if you will be better off.
    Exactly so.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
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