can anyone explain..

craftingqueen_2

income disregard rule of £25000 for child tax credit, never heard of it?

many thanks
CQ

HappyDuck_2

ok, basically tax credits look at your previous year (PY) & current year (CY) incomes to determine which would give you the greatest entitlement. Usually PY is lower so that figure is used. You can have a CY pay increase of up to 25k above PY before cy inc effects your ent.

eg: PY £10k, CY £15k estimate - PY would be used. You could earn up to £35k (10 + 25) before your CY award would be effected.

This gives you a greater ent in CY, however, come the following year the higher figure would then be used as it would become the PY.

This really benefits people coming off benefits into work as their py would be £0 & cy £10k+. Your award notice always shows provisional payments for the next year - they will usually show a drop so do plan ahead!!!

This is also the way the government are removing a massive chunk of the overpayment problem - previously you could only have a £2500 increase before your award was impacted, many families had pay rises above this & were overpaid. Now many people have £25k pay rises - stats now look much better!

DaisyFlower

Although thee is a disregard, you still have to advise them of any changes in circumstances.