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AIBU?

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Original poster

AIBU to think that moving bf in will impact on tax credits?

47 replies

Johnogroats · 03/02/2015 15:50

Backstory...ex SIL shares custody of 3 kids with DB - 5/9 split. He pays c£1300 child maintenance, but clean break (she got over 80% marital assets) so no spousal maintenance.

The childcare arrangements are difficult mainly because she tries to move the goalposts. His job is not one where he can drop things at 5pm to collect kids all the time...he has suggested an AP ( to live with him, but look after kids at both homes ) which would have any advantages both financial and practical. She objects mainly because she will lose tax credits.

So, if she is earning c£20k pa, working part time, tax credits will boost her income significantly, and she can claim these in respect of after school club etc? Correct? The child maintenance is irrelevant as far as tax credits go I think.

But, if her new bf moves in (I think he earns c£80-100k), that would be taken into account. Am I right in thinking the tax credits would be lost? DB could then explain that his proposals do make even more sense.

If He doesn't get workable childcare he will lose his job, and the child maintenance will be impacted. He is financially stretched to the limit.

Thanks in advance.

OP posts:
mywholelifeisaheadache · 03/02/2015 16:07

£1300 maintenance is why they should include it in the tax credit calculations! (and i say this as an ex single parent!) and too right she'll lose her benefits if her partner is on such a high income!

sliceofsoup · 03/02/2015 16:12

Yes she will lose tax credits, as they are classed as a household.

To be honest, I don't think that tax credits for an income of 20k are that substantial in the grand scheme of this situation. If your DB is offering to pay for an AP on top of the maintenance I can't see how that would financially hurt her at all.

Original poster
Johnogroats · 03/02/2015 16:16

Thanks!

To clarify, out of the maintenance she currently chooses to pay for before and after school club which costs c£800 pm. The AP would cost c£500 and you'd get babysitting etc savings too. He's not paying on top, but trying to find an alternative that works for both.

OP posts:
YeahDamon · 03/02/2015 16:16

Why would she lose tax credits if he hires an au pair?

It's not actually up to her how he arranges childcare on his time.

If she moves her bf in then she will lose all her benefits including child benefit.

Sidge · 03/02/2015 16:19

She would lose her Tax Credits and Child Benefit if she moves in with her boyfriend.

They take household income into account when calculating eligibility - maintenance isn't included but if she didn't declare her boyfriend's income then she could find herself subject to a fraud investigation.

YeahDamon · 03/02/2015 16:19

Ah I see, he's expecting HER to fund the Au Pair?

I see the problem in that case. She can currently claim Childcare Tax Credits to fund up to 70% of the before/after school club. You can't claim for an Au Pair as they aren't OFSTED registered. So she would have to find £500 a month instead of around £240.

He is being unreasonable, if he wants an Au Pair on his time he needs to pay for it.

YeahDamon · 03/02/2015 16:20

If the boyfriend moves in this becomes moot and the Au Pair would be the cheaper choice.

sliceofsoup · 03/02/2015 16:22

She still wouldn't lose out. Childcare tax credits get paid directly to the provider so its not like shes losing money in her hand.

Maybe it just boils down to her not being comfortable having an AP in her house. Maybe she thinks the DC enjoy the current clubs.

OnIlkleyMoorBahTwat · 03/02/2015 16:22

It does seem a bit unfair that her new DP is expected to support children that are not his, but that's how the system works. She will no longer be entitled to any TCs or CB due to him earning more than 60k.

With that amount of maintenance, perhaps the tax payer shouldn't be supporting her either? 20k salary plus CB plus 1300 pm maintenance means that she is hardly on the breadline does it?

YeahDamon · 03/02/2015 16:23

She would, because she'd have to pay 100% of £500 instead of 30% of £800...

sliceofsoup · 03/02/2015 16:23

The tax credits are up to. I would find it very unlikely that someone earning 20k would be receiving the full 70%.

YeahDamon · 03/02/2015 16:24

I doubt she gets much in the way of tax credits on a 20k income anyway.

YeahDamon · 03/02/2015 16:24

x-post

YeahDamon · 03/02/2015 16:29

Well according to EntitledTo.com she'd be getting
Yearly Weekly
Initial Tax Credit award for period: £14,450.70 £277.90
Working Tax Credit: £5,646.90 £108.59
Child Tax Credit: £8,803.80 £169.30

Final Tax Credit award for period: £14,450.70 £277.90
Working Tax Credit: £5,646.90 £108.59
Child Tax Credit award: £8,803.80 £169.30

YeahDamon · 03/02/2015 16:29

That's on 20k, three children, £200pw childcare costs...

Original poster
Johnogroats · 03/02/2015 16:33

This is all really interesting - thanks for all contributions.

Fwiw, the Consent Order actually referred to an AP as an option, and she has been very happy to borrow mine in the past. AP would live with DB. It's not "her" money, it is for the kids... It includes things that they do while with DB.

Her arguments for pre school club include the fact that she doesn't want to buy or give the kids breakfast or dinner. There isn't a lot of logic here. I could go on, but in danger of outing self.

Ilkley and others...I don't disagree! However, I might be seen as vindictive if I made that point or mentioned that she had approaching 400k out of the settlement. Our benefits system doesn't seem right, but that's a whole different thread.

OP posts:
YeahDamon · 03/02/2015 16:35

If she has a lump sum in savings then her entitlement will go down. But she probably used that to house herself and the children, I imagine?

Original poster
Johnogroats · 03/02/2015 16:38

Yeah...sorry, don't quite follow. Re figures below, do you mean that currently she's getting c£277+108+ 169, all of which she loses if bf moves in? Without bf, if they agreed on AP, the element she would lose would be what?

Sorry for being dim.

Well according to EntitledTo.com she'd be getting
Yearly Weekly
Initial Tax Credit award for period:£14,450.70£277.90
Working Tax Credit:£5,646.90£108.59
Child Tax Credit:£8,803.80£169.30

Final Tax Credit award for period:£14,450.70£277.90
Working Tax Credit:£5,646.90£108.59
Child Tax Credit award:£8,803.80£169.30

OP posts:
Original poster
Johnogroats · 03/02/2015 16:38

Correct re lump sum. She has house with v small mortgage.

OP posts:
YeahDamon · 03/02/2015 16:40

No, the larger figure is the total award, broken down into two parts, child tax and working tax.

So £277 a week of which she pays out £200 for childcare.

Original poster
Johnogroats · 03/02/2015 16:45

Ok. So she claims 277, (remember she has 1300 maintenance as well). Can someone explain how she uses this for registered childcare (I get that AP would not qualify).

Again, sorry ths is all new to me.

OP posts:
YeahDamon · 03/02/2015 16:46

Most if the award is based on the £200 a week childcare. This has to be registered, and they ask the childcare setting for confirmation.

Au pairs don't count.

Original poster
Johnogroats · 03/02/2015 16:53

So, if she didn't do the registered childcare, she would not be entitled to claim the £200/week. So instead of getting the £277, she would be entitled to only £77.

Did I get that right?

Thanks!

OP posts:
kinkyfuckery · 03/02/2015 16:54

If he's paying £1300 a month Child Maintenance, he must be on a decent whack himself. Why don't they just sort out their own childcare, based on the hours the kids are 'supposed' to be with each parent??

Sethspeaks · 03/02/2015 17:27

Why doesn't he just sort out childcare to suit him, and leave her to do whatever she wants to do?

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