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Commitment bonus dilemma......15k or not.

(7 Posts)
bubblegumpop Sun 18-Sep-11 10:09:22

I wanted to ask those of you who or oh's qualify for the 15k commitment bonus.

We have a dilemma. I know this sounds ungrateful and most people would jump at 15k before tax, but practically, we'd be worse off hmm

We do still get a fair wedge of ctc due to having to high care disabled children. I am there carer. Now it's bloody hard work and the money we do get extra because of this goes on groups, therapy, respite, etc, etc. Not to mention the extortionate electric bills, fuel for hospital, extra car, bust washing machines etc.

Anyway my hubby could claim 15k before tax so about 10k? I n 2 years. As it's TAXABLE. This would destroy our tax credits. Leaving us really struggling throughout the year. The 10k odd would have to go back into living expenses. Rather than say a house deposit. Then to top it all, with the new chb rules. For one year only we'd lose our chb as he'd be in 40% tax. So we would actually be worse off for taking it!

He has the opportunity this year to take 7.5k then 5k in 2 years I think. So it wouldn't be as big a hit on the ctc, and we'd still get chb.

I'm just stuck as to what to do. The 10k was always going to be used as a house deposit. But I don't think we can actually claim this as it would screw us over and we'd be no better off.

Anyone in this boat, wdyd? As it's causing us a bit of stress tbh. He's waited to claim hoping we could get a house. I've worked it out and we'd be worse off confused

scaryteacher Mon 19-Sep-11 09:45:22

Get him to check with the pay office how it is actually taxed if he hasn't already done so.

You don't lose your chb with the 40% tax, but it is taxed at 40% rather than being free, so you get 60% of it rather than 100%.

bubblegumpop Mon 19-Sep-11 11:00:37

I'll get him to ask. That's interesting. I thought if you go into the higher tax bracket from 2013 which will be the year he claims. From then all child benefit was cut for higher rate tax payers.

Which he would be for that year.........leaving us a hell of a lot worse off. So have I got that bit wrong?

bumpybecky Mon 19-Sep-11 11:03:24

sorry, know nothing about forces pay, found this via active convos, but...

does he have to take it as cash?

can it go into his pension? if so it won't count as income for tax credits

bubblegumpop Mon 19-Sep-11 11:21:00

No it's a bonus he either signs for it or he dosen't. All depends if and when smile

scaryteacher Mon 19-Sep-11 13:52:52

I wouldn't worry about the cb element either. From what I'm reading the govt haven't yet worked out what they will do when the recipient of the cb isn't a higher rate tax payer as in our case (gave up job to go on foreign posting with dh).

I'd wait to see what the nuts and bolts are first.

When dh got a retention bonus way back in the dark ages of last century, I think it got taxed at source, but didn't affect his salary taxation iyswim.

scaryteacher Mon 19-Sep-11 13:54:08

Bumpy - the Forces have a salary restriction (so they get 8% less in their pay settlements) rather than being given the money and paying it in. I don't think there is anyway it can go into the pension as it isn't a private pot, but is paid by HMG.

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