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
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.