to be really really confused about tax credits "income disregard" and beg here for advice?!?!

[CaramelisedOnion]

Ok....i had a substantial drop in income....lets say for the sake of easy figures that last year I made 17,000 and this year I made 9,000. I estimated 10,000 when I gave them income details at my renewal in order to avoid getting overpaid.

Apparently throughout this year the tax credits have based my award on 12500 due to a " fall in income disregard" of 2500 . I was under the impression that this was a securtiy measure against overpayment, and that at the end of the year I they would reassess my award based on the actual end of the year amount and that I would be given the difference back in a lump sum. I am starting to worry now that in fact this is not the case, and in fact the "disregard" means just that....that they just are going to act as if I made 12500 all year.

Does anyone understand this stuff well? I am so confused....and quite cross really as I have struggled financially all though this year (single mother....child in full time nursery, receive no maintenance etc etc) but comforted myself with this idea that at least I would get a bit of a windfall in june.

Please advise!!

[MissDuke]

Yes the disregard means they disregard 2.5k of your drop in income, so they 'pretend' your earnings were 2.5k higher than they really are - it sucks!!! The security against overpayment is that you can earn 5k more than you expected without being penalised. Hope that makes sense!!

[CaramelisedOnion]

great. fuckers. absolutely unbelieveable...as if a drop in income like that in´t enough of a kick in the teeth as it is!!!!! Now I have done a bit more reading into it all it seems that this was brought in in 2012......cheers Dave