Is there an optimum number of hours to work for maximum tax credit benefits?

[Twoddle]

I'm a single mum who needs to go back to work after five years of SAHM-dom. I have recently come across a part-time job vacancy with my previous employer (with some flexibility hours-wise) that I think I'd like to go for.

A few weeks ago, some helpful posters on this board introduced me to the idea of working tax credits (thank you!), but I'm still getting my head around the system: I remember some mums saying they were almost as well off working 16 hours/week as they were 24, or something like that.

So I'm wondering, on a salary of say £25-30k pro rata, if there's an optimum number of hours to work per week?

TIA.

i think i'm right in saying you need to be working 16 hrs to get maximum wtc
not sure at what point it starts to pay less

www.entitledto.co.uk

my sister works for IR. magic numbers are more than 16 but less than 20 HTH

Thank you, seriouslyblonde, elmo and ella, for useful info - in particular the 16-20 hours "magic" window. I'll go through the form-filling on www.entitledto.co.uk and see what comes up for different hours options. Helpful to know this stuff so that, should I be fortunate enough to get an interview (or even the job - steady!), I know precisely what number of hours to make a pitch for. Thanks again.

Oops, I meant thanks seriouslyblonde, bahia and elmo. Duh.

but I get more now that I work 30 hrs as that's counted as full time!!!

You can always ask the lone parent advisor at your local job centre to crunch some numbers for you. Simply make an appointment, tell them you're looking at going back to work and what would the situation be on £x amount at 16 hours a week and how much better off are you working more hours.

I used to work 21 hours a week. I am actually better off now I only work 18 hours a week. Significantly better off I might add. Crazy isn't it.

30 hours is the maxiumum for tax credits to really pay off. For me I can work 38 ie five days a week or 30 ie 4 days a week and the money won't be much less as the benefit sytem allows me to stay at home that one day on only a slightly reduced amouunt. OK as parents we maybe need the one day at home to organise stuff for our kids. Doctors, Dentists and if on flexi that all important sports day, school play, assembly.

If you have a resonable income i.e over 25K then you are better off working the full five days as tax credits cut off at arouund 21K. Depends how important your one day off is in monetory terms. To me to be able to collect my child from school and keep myself sane (sp) was invaluable. For 20 quid a week less, priceless.

so is it the amount of hours rather than the income?
i'm self employed so just sort of guessed at my hours ( 21 ) maybe i need to guess again at 18?
would it make a difference even if my self employed income is quite low?

just bumping to see if anyone knows ?

it goes on income, over 25k you wont get WTC anyway just CTC

no i don't earn much at all. so it makes no difference if i work 16 or 30 hours?

so if i work 17 hrs a wk and earn £250 p/mth
do I get more WTC than if i work 21hrs p/wk and earn £250 P /MTH ?

No you don't (unless you're claiming the childcare element and are over the maximum amount of childcare).

The rate of WTC is the same between 16-29 hours per week assuming that the income is the same. Obviously most jobs pay by the hour so the increase in income results in a loss of tax credits.

There is an increase of over £700 per year if you work 30 hours or more per week.

Yes the maximum payout for WTC is for working 30+ hours, but obviously your income affects how much of the award you get. I was much better off working 30 hours a week than I would have been working 16 - 29. (Was a tax credit officer lol)
The only way you can figure it out is with exact numbers really, how much you'd be earning in each scenario and how much you'd be paying in childcare.
You need to do the calculations for both 16-29hrs pw and 30+ hrs per week. There is a calculator on the HMRC website.
hth

mmm interesting, might have to think about upping my hours? i get about £400 p/mth wtc is it alot more for over 30 hours?
am going to be losing my smp next month so might start to struggle.
thanks for your replies
oh and i will use the calculator thing just easier asking you lot!

For me it worked out at three days per week - any more than that and I would have been earning too much for housing benefit meaning that I would have been homeless (the extra pay would have in no way covered the rent).

if you go to www.hmrc.gov.uk/RATES/taxcredits.htm you can see all the elements of Tax Credits that they use to work out your allowance. You can work it all out manually, using those figures, if you have a head for figures. Sometimes quicker than going all the way through the calculator, because you can just 'play', adding on and taking off amounts, and the only real calculation you have to do is (Annual pay-6420)*0.39 to work out how much you will have deducted from your total award.

Once you have the annual figure, you can divide by 52 and get your weekly figure.