To be shocked about tax credits....

[butterflyroom]

I earn slightly too much to receive tax credits following government changes. My colleague who earns less than me, told me that she receives working tax credits AND child tax credits of around £80 per week. I am shocked at how much this totals monthly!

AIBU to be shocked and to wonder why I work hard and full time to earn more when it's probably not financially that beneficial to do so?

Hard hat at the ready.......

You could say that. Not all of us could. And it kind of is a reflection on you.

Not really.

In an ideal world everyone would be better off working and of course in that case I'd work. No issue. But as it stands it doesn't pay me or my family for me to work even though dh does work full time.

I'd like to be all ethical and moral about it but who would go to work even though they'd be worse off ?? In all honesty. Not many.

Exactly Wordfactoey, volume of work isn't always consistent so employing extra staff just isn't justified.

Short termism. Kills ambition too.

Wigglewoo when I went back to work, I was less well off than when I was not working. Not working, my ex-h paid child maintenance and spousal maintenance, plus I claimed tax credits at full whack. Working, he stopped paying spousal maintenance (that was in the terms of the consent order), so I just had the child maintenance, my income, and the tax credits (which reduced because of my income). My income after tax anyway was less than the spousal maintenance had been. Overall I was about £300 per month less well off and it was a real struggle.

BUT

I did not want my DCs growing up with the mentality that "it's OK not to work because the state will pay".

So I think you are wrong. It's about values. Not everyone thinks it's OK to sit back and expect the taxpayer to support their family.

wiggle I suppose if the only work is fairly dead end, then many may choose to stay at home.

But if the work is fullfilling or will lead to better income in the long run or has a pension attached, then it may well be worth it, even if you might bring in the same money in the short term.

Similarly some families don't want to rely on benefits becasue being dependent upon the government is so precarious.

Tax credits AMAZE me. I thought it was actually a "tax credit" like a rebate on tax paid. I didn't realise it was actually a benefit. Someone posted here earning c£7k and she (according to the entitled to website) was going to get £11k in tax credits - more than she actually earned.

I was slightly worse off working when I had two kids in nursery than if I'd stayed at home. Certainly worth it for the long term benefits of staying on the career ladder, keeping pension payments up etc

It's where people are in 'jobs' rather than careers that this is really a problem. Staying in a career even when you're no better off short term, is something you will probably be bloody glad you did. A menial job is different. It shouldn't be like that though- anyone who works, no matter how modest or low paid the job, should be better off than if they don't

I get where you're coming from wigglewoo. I am a higher rate tax payer and don't qualify for any tax credits so no personal axe to grind, but I don't think you can blame people for making rational choices about what benefits their own families. Provided they are not fiddling the system and claiming dishonestly, I don't think what they are doing is immoral. The system, however, is all screwed up as people should always be better off if they work.

I too come up against the reluctance among workers to do any additional hours due to the impact on tax credits. Very frustrating.

Well the idea is that it is a rebate of tax for low earners. But some families get more tax credits than they actually pay.

The problem is that in this country, in this day and age, you can have two adults in full time employment who still cannot afford to cover their rent, bills and food. What we really need are jobs that allow people to live on their wages. Tax credits are really just a means by which the government subsidises the employers' poor wages. The main problem, cited on many another thread, is extortionate house prices and rents in most parts of the country.

Honestly I can see what people are saying having been the woman who went back to work when dd was 6 months old as a single parent getting 2 buses to the nursery and work everyday to be £10 better off a week than if I hadn't bothered... I wanted to be the "working mum", the one who set a good example to my dd and I was all for the morality of the work ethic. I do totally get it.

But roll on 9 years, 3 jobs and a lot of stress later, for me personally my family is happier with me at home (although dh does work a good full time job so our children know the importance of work) and I am lucky to be in a system where we are (currently) better off if I don't work.

However all that may change with universal credit coming in and that's fine. Then I will apply for work again, not neccessarily in dead end jobs either. I have a good record in marketing and am still in contact with clients who I could do freelance work for to gain current experience and references.

I do understand how utterly ridiculous the situation is though. I'm not saying its morally right. It isn't.

To anyone who has had an overpayment this is a good site, if you believe they made a mistake www.taxcc.org/

I've just started a dispute against them for an overpayment of approx 4k

Can I please point out that there is nothing to say you can't do overtime? They want your AVERAGE hours worked, and unless you earn over £10,000 extra, it doesn't affec anything.

Saying that, I have to ring them every eight weeks or so (stuff keeps changing) and it is a pita.

I remember being a single mum, working full time and privately renting an ex council house for nearly twice the amount as my neighbours, who's houses were still owned by the council. Needless to say, there was no chance of me ever getting a council house.

I had some neighbours who were unemployed, and others who had 4 or 5 children with the man working at a low paid job, they seemed to be much better off than I did, with more disposable income.

The moral of this story, concentrate on your own finances, otherwise you'll get yourself all worked up.

Oh, and if you are working out if you I'll be getter off at work, remember to factor in that you will most likely still be eligible for HB etc (presuming the difference between no income and ft mw)

I know we get more tax credits, HB etc now we both work than when neither of us or just dh did.

Wordfactory, you're wrong about the idea about tax credits. The principle can't possibly be that it is a credit for lower rate tax payers, otherwise it would not be possible to claim tax credits if you have no income at all (which I did when my DCs were pre-school and ex-h had left). Child tax credit is just another benefit for families below a particular income threshold. The ridiculous thing is that child maintenance and spousal maintenance payments do not count as income for this purpose. So you could have someone receiving, say, more than £3,000 pcm in maintenance from a wealthy ex, who can also legitimately claim tax credits.

A big part of the tax credits is childcare element. Many folk will only qualify for this, and this can only be claimed if using childcare to enable work.

If you are close to the cut off why don't you look into paying more into a pension or charitable donations. These both (used to anyway, not checked in a while) reduce your income for tax credit purposes. What's the point? Well you can get the same overall yearly income but be building up a bigger pension or giving some to a charity of your choice. Also remember to look at ways of reducing your income by claiming deductions where appropriate eg nurses can claim for cleaning uniforms, some union memberships can be claimed as deductions
This is a bit out of date, sorry, it's been ages since I looked into it

wigglewoo, I get what you mean, and fair enough - yes, I think you'd be mad not to take advantage of something legitimate that clearly benefits you!

I'm self employed, a higher rate tax payer these last few years, BUT my work and income is unpredictable. I'm currently having a very low earning year. Tax credits for me are worse than useless. Check out the CAB and Child Poverty Action Group statements on why they are shit. If your income varies at all over a year then you can be stung with huge repayment bills when you just don't have the money. So people get into debt trying to repay them. It's just insane.

And then for the low earners whose shifts are not the same each week, or for the worker offered overtime they might really want - the system sucks. It is ONLY beneficial for those who earn exactly the same amount each year, and who know what that will be in advance.

it also encourages dishonesty - if i was offered overtime in a low paid job, I'd be asking if they could pay me off the books. It wouldn't be worth it otherwise.

I understand your point. If I were to earn more money at work, we'd be less well off due to lack of CTC. It's not exactly spurring me on to further my career!

ooo goat jokes aren't funny?
neither is benefits bashing...

again, just because you see it doesn't mean its there.

Wheresmespecs - The WTC system does not depend on regular hours/wages at all. A claimant estimates (if no actual figure available) their income for the year. So long as this does not rise by more than £10k, and the claimant keeps TC Office informd, they will keep the level of payments awarded and not have to pay anything back iyswim?

eg. Newly single parent declares income for year at £12k, but then gets extra hours offered. Calls TC office who recalculate with new info. Works hours worth an extra £2k per year at irregular intervals so ends up earning £14k in that year. Come renewal time, next years claim will be based on £14k but no repayments will be due, regardless of how much received through year.

So long as people inform TC office of any changes, which may change their paymenst from then on, no money will be classed as overpaid up to an income increase of £10k.

My tax credits have stopped and we have allegedly been over paid by £660 since Jan, told them it was wrong in april when i got p60, they said wait for your form to come, it arrived in July and i returned it straight away, so in my opinion it shouldn't have happened. Anyway I rang them and was told by the tax credit helpline that tax credits are not a benefit and shouldn't be used to live on... WTAF? then he said 'you need the jobcentre'!

Can't believe how rude he was. Luckily I have just been offered a full time job where i work part time so should be ok without them now.