lets have a tax credit rant thread

[maighdlin]

as it is the joyful new tax credit year i thought i would start a thread for people to rant on.

our tax credits have gone down to £33pw when according to HMRC calculator it should be £68pw. i received no letter from them informing me of this cut. i phoned them and they are using an estimate of our income based on the assumption that i would have been working full time since having DD, not true was made redundant. They said i can't get it fixed until i receive my renewal pack and i may not receive it until 30 june. GREAT!! DH earns just over 15k we pay 660pm for mortgage and rates. i'm a full time student but most of my money goes on child care. can't get a job as most jobs that i could do are min wage and they would have to pay me more than a 16 year old so 16 year old probably gets job. I feel like banging my head against the wall. even more money worries!!

feel free to vent about tax credits below. overpayments, underpayments, their general unhelpfulness...

As Hammy says they are slowly doing what makes sense - increasing the amount no one pays tax on and abolishing the credits which are have been complicated and not been easier for people than before we had them. They have not been a success and put so many people earning under £60k a year or did into a kind of receipt of benefits type of mentality.

i told them that i was made redundant when i had initially made the claim. i first claimed after DD was born in august 09, i was made redundant in may 09. when i made the claim i told them that i was previously working but had been made redundant and was claiming maternity allowance after the MA ran out i moved on to ESA which i told them about as ESA is taxable and effects tax credits but MA does not. so 1st year was based on two full time wages, 2nd year based on DH's wage as i was on MA for most of the previous tax year and then this the 3rd year should only be DH's reduced wage plus the 1000 or so i got in ESA.

what doesn't make sense though is if both people are below the threshold, then are entitled to tax credits, and unlike other benefits is not based on household income

They are based on household income though

Yes - it's definitely based on total household income. Are you getting confused with Child Benefit ilovemydog..?

well last year some stupid bint removed my husbands income last year they paid me £250 per month i was calling to reduce my income from c. £27k to £17K due to drop in bonus from work (so still same hours) therefore i expected it to go up and didn't question it, turns out we should only have got around £80 pm so they are claiming back the over payment i now get £7.50 per month doesn't even pay for a weeks lunch at work!!!

i appealed and despite the fact that the person i spoke to initially logged it on her system but didn't process it correctly all later confirmed that it was their fault from notes on their system, i still got nowhere and have to pay it back.

they are absolute crap and not worth the trouble you need to go through to get them.

if i made as many mistakes in my job im sure i'd be sacked by now!!!

We got a letter saying ours has stopped too. We did get £40 a month from them. I'm surprised at some of the decreases on here, they sound fairly scandalous!

I'm just grateful that our childcare vouchers aren't affected, seeing as DH and I both claim the full amount. It's a fantastic scheme.

But you knew at the time the claim was wrong so i'm not sure how it could have been a total shock to you

Have you got all there old letters from them and checked that at each change of circumstance they sent you a correctly updated letter?

If there are any missing or wrong letters they have cocked up somewhere and you need to ring them and confirm that they have those missing changes on there system. Have everything in front of you.

If they say "wait for your renewal pack" say, "No. I need to do it now. You are asking me to make a false declaration by refusing to acknosledge my change of circs when I tell you about them." If they keep saying no, ask to speak to their supervisor.

The point is even if you call up and say you are over paying me, record this call I Insist you stop over paying me, they don't and then you get threatened with all sorts. And they lose the recordings if it doesn't suit them.
I used to put my tax credits into a savings account and then when I knew it really was ours, no errors I'd spend it on a holiday but some people need the money to actually live on and that is/was the biggest mistake IMO, we never budgeted for them so if they stopped tomorrow it wasn't an issue.

I know we are lucky to have never been overpaid for more than a few weeks.

But I have been on their tail a lot too. I am always on the phone checking - not so much that the money is right - but their facts are right.

In this case it seems that the facts are wrong, they are reducing her payments because they think OP is earning when she isn't - and the person that is liable for that is you, not them, so don't let them get away with it.

15k a year and you pay £660 mortgage how on earth do you eat?

Try £9K a year and a £600 mortgage which is what we're on now. Apparently we'll get £42 a month tc though so all should be well I got severely told off on another thread for talking about this though, so will not hang around for too long

They almost always weasel their way out of letting you keep overpayments. The rules are that even if it's their fault, if they consider that you could "reasonably' be expected to have noticed that the amount you were getting was wrong then you still have to pay it back. Basically the onus is always on you to check that you're getting the right amount. So check your award notices very carefully and use a calculator such as entitledto.com to check that the amount they're paying you looks right.

Lovecorrie, presumably you get HB, though?

I don't understand the purpose of the system at all. I thought it was to give back some of the tax paid by a family so that it can go towards childcare therefore enabling people to work...

e.g when I went back to work (single mum) when DD was 3 months old I earned £1000 a month, childcare cost £820. I paid £250 in tax and received £650 per month in tax credits. So I was taking out far more than I put in, but it enabled me to work and now 6 years later I pay (shivers) about £800 in tax a month and take nothing out.

What I don't understand is how it is called tax 'credits' when so many people take more than they put in? Surely for most people the tax credits are just a benefit, almost like income support or something? To me, calling them 'tax credits' and making out like theyre different to benefits has just meant that people who would have cridged in the 70s for taking benefits, can take money from societies pot without any of the guilt or stigma.

Now, as I said, I myself have benefitted from the system. It can work. However, for a first I beleive the 16 hours is too low. People should not be able to claim tax credits on the babsis that they work when they work only 2 days a week.

It should also be reveiwed when people have claimed for a period of time to see if they are in fact looking for more hours, or better paid work.

The idea that they will be fazed out and people will pay less tax is GENIUS it actually encourages more working rather than less, which IMO the current system isn't doing.

Minimum wage needs to increase.

And I am sorry maighdlin but I am not happy to pay for you to study full time. I would give my right arm to go to university but I have a family to support. I am not saying only the wealthy have a right to education, if less money was spent on IMO the wrong things, and you are particularly bright there could be a separate bursery awarded to gifted people who we need to be trained so we can all benefit.

It seems to me there is far to much choice and not enough responsibility being taken.

If a person wants to be a SAHM, society has to cough up, if someone wants to study full time, society has to cough up etc etc

Suerly people realise that if EVERYONE made these choices we'd be screwed, right?

Urrrm, sorry - you did ask for a rant!

You can't get HB for mortgages only rent.

Corrie, I really can't see how you are going to manage that! Also think your TC look wrong.

Will you sell up? Your rent will probably be more than your mortgage but at least HB will cover it and there'll be money for food.

dont you have to be on JSA to get help with a mortgage ?

We won't get mortgage relief as we do have a salary coming in - I have reluctantly signed on for contributions based JSA - if it was income based, we would get mortgage help. Hopefully we will ride it out and I'll get another job. Luckily we do have some savings which we can use - not enough to stop me getting JSA, but enough for two or three months living very carefully. it's all a bit of a worry. I have appealed our tax credits decision and am waiting to hear - does seem insane!

And at least you have a mortgage. DP and I earn a good income and we can't afford to buy.
We pay his ex a lot of money each month for CS. She works the 16 hours and therefore claims TC by the bucket load... the maintenance isnt taken in to account at all and so she's better off than us.. he pays tax on his income, then he pays her out of what's left, then she claims £700 TC too... she earns £400 a month and ends up with about £1600 pays no tax as she's under the 7k, gets maximum TC as she works 16 hours on minimum wage... and this is a system that ENCOURAGES working...? my arse.

At 9k a year you might be entitled to income support, if you aren't able to look for work and are therefore on JSA.

On the rumour that the current gov. is going to take away tax credits completely, and raise the tax threshold, I have to say that would penalise the most vulnerable of us, ie those on the lowest incomes, who earn the least, pay the least tax, therefore we would lose a lot more than we would gain.

On £700 net salary up till now, I have been eligible for about £550 pm in tax credits (inc. childcare element, child element working lone parent element) and I don't see how raising the income tax threshold could cover anywhere near the amount I receive. I only pay about £100 income tax and NI pm. So even if I paid 0 tax, if they completely take TC away we will be in the shit, for being a lone parent.

I would dearly love to find a caring DP, and not have to rely on help from the state, but in the 5 years I have been on my own, I haven't had any luck. Now I feel like I am being doubly penalised. Not only am I lonely, struggling, but that isn't enough, now I should live in abject poverty.

Lets say that it happens. I will have to stop paying into my small pension, in order to earn around £840pm take home pay. Rent is £340, Childcare is £160, bills add up to around £250 (conservative estimate), and add on top the cost of running a car in order to get to work (rural area), I would be in debt every month before even buying a tin of value baked beans and a loaf of basics bread!

So, great, get rid of tax credits, but be prepared for a lot of kids returning to living under the poverty line. Be prepared for hoards of LPs being unable to return to work because once they pay for childcare, and stop being eligible for free prescriptions etc, they would not be able to AFFORD to work. We aren't talking about us being unable to buy luxuries, we don't buy luxuries now, no without this help, we wouldn't be able to buy food, heat our homes, or even survive!

Fair enough missymarmite, I see your point, I would have struggled too when I was claiming TC. Child care is sooo expensive. Maybe keep the childcare element would be an idea? And def raise minimum wage so people stand a fighting chance of survival without benefits.
I do think a periodic review as well to see if more hours could be worked/ promotions worked towards etc...