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Tax credits and income question?

(15 Posts)
afromom Tue 26-Nov-13 22:19:29

I wonder if anyone could help me with the answer to this question regarding tax credits? I have tried to work it out from the tax credits website, but can't find an answer.

I currently get a small amount if tax credits as a single mum. My Dad is retiring and would like to give myself and DB a sum of money from his retirement fund to help us along. DB will add this to his ever increasing savings, whilst I struggle to get by each month as it is and would really benefit from a 'slush' fund for when times are tough,or the unexpected happens (which currently leave us up the creek!) and also to be able to let DS go on his football tour and school residential, without stressing over how I can possibly afford it! However, I'm a little concerned that this money would then be seen as income by the tax credits and therefore just end up getting frittered away on day to day expenses, meaning that my tax credits would be taken away. I know that Dad doesn't want this to happen and was hoping that they money would make life easier for us for a couple of years not just to support my day to day living expenses.

Does anyone know the answer please?

morethanpotatoprints Tue 26-Nov-13 22:29:46

I'm not sure if it is the same now but it used to be only income earned that was assessed for tax credits, you could have savings. Your Dad is giving you a present, you are not earning it, I believe this to be the case.

afromom Tue 26-Nov-13 22:32:24

I was hoping that would be the case. I thought about the savings but, but figured it wouldn't be classed as that as I hadn't saved it myself? If they would look at it as gift rather than earned income that would be great though! Thanks

weepingvipers Tue 26-Nov-13 22:39:28

I don't know the answer for tax credits however, if it is a potential problem, would your dad be willing to open a slush account for you. So it's "his" money but you have a card to withdraw cash for a trip/car repair/whatever situation? I know it's probably not strictly how things should be done but I assume you're not talking about change your life, buy a house and retire money just give yourself a breather money?!

Katz Tue 26-Nov-13 22:41:46

I thought there was a question about savings?

afromom Tue 26-Nov-13 22:47:45

Yes weepingvipers not a change your life amount, just a bit to last a couple of years and be able to repair car, say yes to a couple more things for DS, when the answer is normally sorry we can't afford it. Him having the account would be a possible, hadn't thought of that. He would be happier with that than us not having it at all. I know he wants us to have the money, but wouldn't be happy if it just funded the rent for a year.

afromom Tue 26-Nov-13 22:50:04

I checked the website about savings and it says that you can have savings and still claim tax credits, but that all income must be declared (including interest from any savings, which I'm guessing in the current climate would be very little?)

bellablot Tue 26-Nov-13 22:59:16

I've been looking into this recently and it appears to be: if you have more than £16000 in savings of any sort than that will affect benefits. However if the savings are in a child's name these are discounted from the benefits calculations. Hope this helps.

afromom Tue 26-Nov-13 23:06:06

Great thanks, not more than £16000 so that's good. I think I may have to bite the bullet and call tax credits to ask the question. Don't want to get caught doing anything wrong, or misclaiming money I'm not entitled to.

LightastheBreeze Wed 27-Nov-13 05:42:12

We used to have quite a lot of savings and shares and get tax credits, we had to declare any interest and dividends over £300 as income.

I think when Universal Credit comes in, savings are counted though.

LovelyBath Thu 28-Nov-13 12:27:49

I was wondering about this too as we might be getting a bit from a relative next year. I didn't know whether it would qualify as savings or income for the tax credits.

OP if you find out would you mind posting back? smile

greensnail Thu 28-Nov-13 12:37:40

We inherited some money while we were receiving tax credits (it was more than £16000). The only thing we had to do was declare the interest that we earnt on it.

LovelyBath Thu 28-Nov-13 12:44:52

Great- thanks Greensnail. How would it work when moving house I wonder- if made a bit of money doing so? In the same way perhaps...

afromom Fri 29-Nov-13 07:53:23

Will do lovely bath. He finishes in a couple of weeks so I will find out how much exactly then and call up tax credits. Then report back on here.

CurlyKiwiControl Fri 29-Nov-13 08:07:43

Hi afromom, you only declare interest earned from savings and only if it is above £300.

(I work for tax credits, hth)

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