Dont understand working tax credit?

[meow951]

Me and oh are trying to work out how much money we will have once we have a baby but i cant get my head around this.

Why is it based on last years earnings? What if you become a stay at home mum and you are no longer working? Do you have to tell them that you have left your job and then they'll change your earning to £0?

Im sooo confused!

 

[charlieann]

I think its a bit of a flawed and confusing system, where you can never get a straight answer

Why is it based on last years earnings?
Im assuming because you can then provide written proof of earnings if required. If it was based on an estimate of this years income then people could put a low estimate to claim money they are not entitled to and the government would struggle to recover it all.

What if you become a stay at home mum and you are no longer working? Do you have to tell them that you have left your job and then they'll change your earning to £0?
You will be able to claim more when you recieve maternity pay as you'll annual earnings will be lower, and can contact them and ask them to re-assess it based on updated circumstances. if you quit work then you'll recieve your p45/p60 (cant remember which) and again you can ask them to reassess it. as you won't be recieving income support or paying childcare i dont think you'll be entitled to a greater amount as it'll be classed as your able to work but intentially chosing not to.

 

[littleblonde]

I have been looking onto this and watching other posts on here. You only get working tax credits if you (mum) works at least 16 hours a week. Im not sure if your OH needs to working as well, but i assume they do. If not then you just get tax credits, Which depending on what yoiur OH works isnt much at all. When you full in the form you put last years earning. But once excepted you can contact them and give you this years estimated earnings if its going to be much less. They will then except that. I worked out for my OH who earns 19000 a year we would get £39 tax credits a month. I got this info from the government website and calculator

 

[Celesse]

Working Tax Credit is a horrible system and hopelessly complicated as demonstrated below with my own circumstances.

What you need to do is:
--Open a claim based on last years income
--Call them to inform of any change of circumstance
--If this change of circumstance is a fall in income they will raise your WTC accordingly.
--If your income has gone up by less than £25k a year they will continue to assess you based on last year's income.


www.entitledto.co.uk = brilliant tool for playing around with the work out what you can get.


My Circumstances:
Last tax year (08/09) both me and OH worked and had no children. Our household income was approx £30k and we are where not entitled to anything.

OH lost his job in April 09 at the beginning of the tax year (09/10). My baby is due in Feb and I will be taking 7 weeks maternity leave this year. During the weeks in which you are entitled to SMP, the first £100 of your earning is discounted while working out your WTC. So the estimated household income for the year is around £15k when corrected for 7 weeks mat leave. This gives us approx £15 a week WTC.

Next tax year (10/11) they will initially calculate the WTC based on this years earnings. However as I am on maternity leave for 32 weeks of this year and receiving a lower wage I will only make an amount similar to £10k when adjusted for SMP. I will receive approx £60 a week WTC.

When we first applied for WTC we completed the form and is was based on our 08/09 earnings. We where of course assessed for £0.
--I called them straight after the assessment to tell them our estimated earnings for the year, not taking into account mat leave. They adjusted our WTC. We then got £9 a week.
--When I got my matB1 and finalised my maternity arrangement I called them again and they adjusted out WTC. This was well in advance of actually going on mat leave and we then got approx £15 a week.
--I will contact them again just prior to 5 April and will inform them of 10/11 predicted earnings at which point they will raise our WTC again.

I will also contact them when baby is born to start our claim for Child Tax Credit.

If OH where to get a job now and work Feb and March it would take our household income for the tax year to a point where we would not be allowed any WTC and we would therefore have to pay back everything we have received.

If OH where to start working in April we would continue to receive £15 a week WTC for the tax year 10/11.