The mum told me today that they are getting £150 more than their monthly childcare bill paid by tax credits. So more than 100% of it paid. I cannot for the life of me think why, as their joint take home salaries, before deductions etc is over £40,000. She says it's because they take the previous years earning into acocunt not the current year, and that the DH wasn't working the previous year (but they weren't claiming childcare either as he wasn't working and she was on maternity leave)
Am I over reacting <prepares to be told it's none of my business>
As far as I know she said that the tax credits people work out how much childcare they pay based on earnings from teh previous year (can i say at this point that she would AFAIK, be on her usual salary when on ML, not reduced pay), so they would still be on £32,000. The dad didn't work at all, as far as I can make out. So they earn over £40,00 and get over 100% childcar epaid, and yet a couple across the road who earn just £3,000 less a year can't get childcare paid, so the mum doens't go out to work as they can't afford it. it seems like a totally ludicrous system to me
I wouldnt worry about it too much, i expect if he went from not working to over 40k then they will prob have to pay some back, it is a silly system
They wont get more than 80% childcare element, but lots of people just talk about the lump figure, ie "tax credits pay me £100 a week, which is my childcare paid" when actually £80 is the childcare element and the £20 another element ctc/wtc
BodleinBabe has got it right. Tax Credits are based on your previous years income as they assume that this years will be similar. If you get a pay rise or have a change in circumstances you have to inform them as otherwise you will be over paid and you will have to pay that money back when they find out, or they will stop your tax credits until the overpayment has been sorted out.
Tbh it not really anything to do with you how much she has told tax credits that she is paying you, if tax credits want to know they will contact you. If she no longer uses you then you could call them to inform them they are no longer clients.
She may have been underpaid for the previous year. Also unless you're earning more than 25,000 than last year your payments are based on the previous years salary. However, it does come as a shock to the system the coming year because you get a loit less help.
Im going to get less help this coming year and am a bit nervous, but because I'm starting to increase my childminding hours (will pay less in childcare) praying it will all work out ok. If she had something to hide I dont think she would have told you so openly. My childminder I would hope would be looking out for me, rather than worrying that I'm dishonest. She actually tells me I stress too much every time I contact tax credits for slightest change in few pounds here and there. I think its a shame really, it sounds a little like you begrudge them, and as long as they're working hard. I think, live and let live. If they work that creates work for us as childminders.
Yes their figures are based on last years earning but they have a responsibility to tell the tax credit people that they are earning more this year. One thing that doesn't appear to have crossed her mind is that when it comes to the annual review coming up t the end of the tax year they will tell her she has most probably been massively overpaid this financial year and not only will she receive less anyway due to the higher income but she will also have to repay the over payment back as well.
It is a bit of a rubbish system in some respects and one that relies on people to notify them of a change of circumstance such as this.
So long as you provide the correct information to HMRC if requested, I'd stay well and truly out of it. This will only lead to you being investigated as well, and can and will find anything to fine or jail you for.
If they were fiddling the Tax Credits I'd very much doubt they'd be explaining it in detail to you.
If they earnt less last year, they'll get more tax credits this year. If they're earning more this year then they don't have to tell them yet, until their annual declaration, and it won't necessarily affect the money they have already received as that is based on last tax year.