Child Tax Credit Reduction Due to Income - Ideal Amount?

Firefly

New Tax Credit forms are now through and although I don't get working Tax Credit, I do get Child Tax Credit.

Due to my income it is reduced by £2000 which has got me thinking that it might be beneficial to work a few hours less but I can't work out how the calculations work because surely if I earn £2k less I won't earn 2k more in tax credit. Or will I?

How does it work?

BoingBoing_2

I was wondering the same, due to my partner working lots of OT last financial year (to save up to pay for wedding) our child tax credits dropped by £50 a WEEK. We don't qualify for working tax credits anymore.

In answer to your question, no I don't think it works quite like that, but hopefully someone will be along later with some words of wisdom.

I'd love to know how many hours my OH can cut off his working week so that we see more of him, yet not lose out on income!

mitchaa

Depends on how many children you have and your annual income.

Without this information its impossible for anyone to help you.

Also a reduction of £2k pa off salary isn't the same as receiving £2k in tax credits as tax credits are obviously not tax and NIC deductable.

BoingBoing_2

2 children, and annual income of anywhere between 17k - 21k depending on how much OT my OH does.

SuziQ

Good question! Coincidentally I heard from a friend today after a long gap. Her husband was made redundant from his area manager job,but now has a 3 day a week job checking the shelves at Morrisons and ordering the new stock down for the shelf stackers. She says although he is bored,they get 4 days a week at home together,whilst wtc mean they are no worse off than in his previous job (I know his prev job wasn't terribly high pay) As they no longer have a mortgage they can't believe their luck!

OrkneyStar

Firefly wrote: »

New Tax Credit forms are now through and although I don't get working Tax Credit, I do get Child Tax Credit.

Due to my income it is reduced by £2000 which has got me thinking that it might be beneficial to work a few hours less but I can't work out how the calculations work because surely if I earn £2k less I won't earn 2k more in tax credit. Or will I?

How does it work?

A lot of people, me included in the past, have used entitledto.co.uk and it will give a good idea. Just enter the hypothetical details. Also CAB should be able to help as they can do a benefits check for you.
I think it would be highly unlikely that the drop in income (minus tax/NI) would be even nearly matched by an increase in tax credits....if only lol

ChocolateLover_3

Can anyone tell me if you have a claim for child tx crdts ,would the amount of personal savings affect the claim ?
I am not working ,only on disability allowance and have a child ,I know I am entitled to £50 ,but forgot to ask if savinf will affect this ?
Thanks Choccy

Firefly

BoingBoing wrote: »

2 children, and annual income of anywhere between 17k - 21k depending on how much OT my OH does.

Mine is probably the same with just one child.

I'll have a play around with entitled to and see if I can squeeze out a few more hours at home.

I just get the feeling that I'm not getting an hourly rate for every extra hour I work now.

space_rider

I have a friend who works 33 hours a week has 2 children eligible for tax credit her youngest gets high rate dla care. Youngest goes to after school club for 1 hour a day. I work 22 hours have the same amount of children and my youngest gets high rate care too and I pay for breakfast club for 1 hour. Amazingly too although we have different jobs we both work term time only and earn the same hourly rate give or take a few pennies. We both end up with the same amount of money each month made up of tax credit, child benefit and salary but I work less hours. I can`t work anymore hours as my daughter is ill quite often and I have to take time off to look after her and then make the hours up, whilst my friend has her mother who can look after her daughter when she is ill. Plus she gets 10 days carer days off per year if needed.

Firefly

If they are trying to encourage people to work, perhaps they haven't quite got the calculations right.

I'm all for working, but this life/work balance thing is so hard, particularly if you are a single parent.