Is this right? - Tax Credits

poppett

After a recent change in circumstance (for the better:T ) we informed Tax Credits and after a phone call today I was informed I would be getting more now than I was up until April. I asked how come seeing as we have more income coming into the household and was told that because our annual income was low last year this is why we are still entitled to it. (Hope I'm making sense here)

So last year when we really needed the money and were living on the bare bones of our bums, we had hardly anything. How on earth does the system work?

The woman on the phone assured me we are entitled to the new amount for this year....lets hope come next year I won't get a dreaded letter saying we've been overpaid.

sarebear_2

HI, i am in exactly the same situation as you . Last year we had hardly any money as my husband was off sick. and this year we have both gone back to work :T (only minimum wage), but are getting double the amount in tax credits we got last year ! I have been told it is assessed on last years income so we will get it till next year , but it will then drop about £50 - £60 per week !!
I am also worried about being overpaid, but they have told me that we won't be !!!
I really can't work it out

whitewing

I worry about this a lot. My accountant has assured me that I am safe to spend the tc that come through. If there is any overpayment (I am part self-employed so was initially worked out on an estimated basis), it will be clawed back via future payments. I find it very difficult to understand what I should be getting, and therefore how to budget.

DreamerV

The tax credit system is based on 2 years.....previous (tax) year, and current (tax) year. Your payments tend to be based on the previous year, because that's the latest tax year you will have a full years income details for....you can't have full earnings details for what you've not finished earning in the current year, as the current tax year hasn't finished. The exception is, if you earn less in the current year than you did last year....then to help those people in that situation....your payments will be based on this current year (estimates you've given) instead. This does mean if you underestimate your earnings, you could be overpaid, and then you'd have to pay that back. (The other exception is, it wouldn't be based on previous tax year, if your whole household earnings go more than £25000 more than what you earned in the previous tax year).

People who were struggling in previous year, and now getting more....well in the previous year it would have been based again on the lower of the then current year, and the year previous to that.....this year there has been a bigger in normal increase because the budget was adjusted to make up for the 10% tax band disappearing....now that that's fixed too, it's like a double bonus.

Hope that makes some sense?

tina1969

Hi
This happened to us and we did not have any overpayment's....just keep them informed as you go along....

poppett

sarebear wrote: »

HI, i am in exactly the same situation as you . Last year we had hardly any money as my husband was off sick. and this year we have both gone back to work :T (only minimum wage), but are getting double the amount in tax credits we got last year ! I have been told it is assessed on last years income so we will get it till next year , but it will then drop about £50 - £60 per week !!
I am also worried about being overpaid, but they have told me that we won't be !!!
I really can't work it out

I'm glad I'm not the only one then! I now write down every time I call them and the details of that call and then if I do get an overpayment letter later on I will at least have some proof that they know all changes etc.

poppett

tina1969 wrote: »

Hi
This happened to us and we did not have any overpayment's....just keep them informed as you go along....

Last year I recieved my final award notice saying I was clear of an old overpayment and then just 10 days later another came through saying I had been overpaid by £2000 odd.:mad: Luckily I had made notes of every time I called them throughtout the year. We had a lot of changes last year due to relocation and hubby in and out of work while we settled and EVERY single change was reported. So I asked for a dispute form and filled that in with all the deatails I held of these calls....it is still being looked into but I hope they will see it's their mistake. (Pigs might fly!) I have informed them I will be getting my local MP involved if needs be because even the three call centre girls I got through too couldn't understand how 2 letters in 10 days could pick that up.

Fingers crossed anyway.

Conor_3

It's absolutely bonkers isn't it? As you say, when you needed the money you couldn't have it. I've found it good practice to update them on my estimated income part way through the year if it looks like being a lot lower than the payments are based on.

helwarren

My husband changed jobs last year with a higher income, so I rang tax credits and told them and they duly sent me notice that from the April our payments would be reduced -as expected. However now after sending back the annual review form they have adjusted the payments back up because they are basing it on last years salary despite being told it has changed! If they say we have been overpaid next year can I dispute it as their error- or should I contact them again?
Tempted to keep the extra money and put into savings a/c to get a bit of interest and accept the lower payment if they try to claw it back.

SuziQ

I have been told 3 times that we were overpaid. The first two times they accepted their mistake but this time I am still fighting it after 19 months. Getting our MP involved didn't help us at all I'm afraid. I don't trust the system at all any more,I get very frustrated when you're told on the phone 'you must have realised it wasn't right' when they don't even know themselves until somone audits it!