I currently work 23 hours a week. But there has been recent talk of reducing my hours to 16. I'm a little concerned re finances of course, but I got talking to a lady who advised me that once I had informed tax credits, housing benefit etc I wouldn't be too worse off! I struggle to understand how this can be... Can anyone help me out? TIA x
I think there's a window between 16-30 hrs where you are able to claim tax credits and any drop in earnings will be balanced out by slightly higher TC's. I'm not sure about housing benefit though.
Is it the 'entitled to' website where you can pop in your details and see what you should get?
And bear in mind that the TC changes next spring will probably still happen and reduce TC's again.
If you are working 23 hours you will already be getting some working tax credits or universal credit unless you earn too much to qualify. tax credits are banded with 16-23 hours being in the same band. Your award will be calculated according to:
1) Basic level of tax credit plus 2) Lone parent element Plus 3) 16-23 hour element minus 4) reduction due to your income
for example if you earn £20000 for 23 hours work with 1 child your wtc will be £0 and ctc will be £2553 per annum
if you earn £15000 for 16 hours work with 1 child your tax credits will total £4603. You would be nearly £400 worse off per year...but not £5000.
