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Adoption

Here are some suggested organisations that offer expert advice on adoption.

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Original poster

Adoption allowance

11 replies

CharlieSays13 · 16/07/2021 15:53

I wonder if anyone could advise. If you are in receipt of an Adoption Allowance can you also claim the child element of Universal Credit? Many thanks

OP posts:

Ted27 · 16/07/2021 19:15

Adoption allowance is not taxable, its technically belongs to the child.

I don't know how UC works but I get an adoption allowance and receive tax credits so I would think its not dissimilar

Original poster

CharlieSays13 · 17/07/2021 07:22

Thanks @Ted27 everything about UC is just so complicated I'm struggling to work it out. No one seems to have an answer. How I wish tax credits were still an option.

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2old2beamum · 17/07/2021 11:38

Another one here who receives child tax credits and an adoption allowance. However when we were on income support many years ago it was deducted, what a strange system. Even more odd when on Pension Credit (yes I am old😋) it was not counted.

Etihad · 19/07/2021 05:37

Yes we have both UC and adoption allowance. UC includes the child element. I was migrated from tax credits a few years after adopting (when I went back to work) and it was never an issue, though I can’t remember ever being asked about it tbh.

Original poster

CharlieSays13 · 19/07/2021 14:47

Thank you for replies. We're still really no further forward, it seems that even people who work for DWP don't really understand UC, it's certainly a very strange system. My understanding was as the adoption allowance is tax free we should be eligible for the child element but as we're new claimants this might not be the case.

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Ted27 · 19/07/2021 19:46

what are they confused about?

I never declared the adoption allowance to DWP because its non taxable. They never knew I had it.

If non taxable income is not taken into account for UC then it should just be ignored

Ted27 · 19/07/2021 19:51

Ive just looked at a website called revenuebenefits.org.uk which sets out what is counted as income.

Do they understand that its not adoption pay, or a statutory benefit

Original poster

CharlieSays13 · 19/07/2021 21:24

Thanks @Ted27, I just don't know what the issue is. I've explained the AA is non taxable but the person I'm speaking to seems to think it should still be counted. I had hoped to apply for Working and Child Tax Credits but that ship has long sailed. Unfortunately UC seems very complicated. I probably shouldn't have mentioned it but I've never been in the position to need benefits before and I was just trying to be up front and honest. I've called Citizens Advice and I'll share the answers I've got here with them. Appreciate it, thank you. 👍

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Original poster

CharlieSays13 · 21/07/2021 21:10

Ok, I think we might be getting somewhere now. Looks like UC will give us the child element however our Local Authority will then deduct this from our AA, so we don't really get it at all. Seems it's a decision made by our LA to promote parity between foster carers, kinship carers and adoptive families. This does seem to be at odds with other people's experience but there you go.

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Ted27 · 22/07/2021 10:35

Its standard for AA to be means tested. Mine is reviewed every year and I have to declare all income, including benefits.

In 10 years I haven't fathomed out their formula but it's not a pound for pound reduction. You might still end up better off.
Don't forget that AA is discretionary and can be pulled at any time, UC is more secure and opens the door to other things, so on balance it's better to have it

Original poster

CharlieSays13 · 22/07/2021 17:46

Thanks @Ted27, really appreciate your help with this. We're just happy to have it worked out at last after all the conflicting information we were getting from UC. My biggest fear was getting something we shouldn't then having to pay it back.

It's no longer a possibility to apply for working tax credit for new claimants. Essentially that's what we'll be getting under UC. Under the old system we wouldn't have had to apply for child tax credit but under UC we don't have a choice. Therefore we'll receive the child element and our AA will be adjusted accordingly.

We've never been in this position before but unfortunately a combination of Brexit and Covid 19 has decimated our business, and industry as a whole. We were a bit naive and confused about the system and the people we talking to seemed completely conflumixed about our situation. I can't believe that we're the only self employed adopters who have hit on difficult times but there you go.

Updating here just incase someone has a similar issue and does a Google search.

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