Housing benefit - including childcare as income - it was never mine though!

[soph252]

Hi there, hope someone can help! I can't believe they can do this, but here goes -

I was receiving housing benefit based on my income obviously including my tax credits payments. I had a 6 month period in 2009 where I needed childcare and the tax credits paid 70% of this. I didn't let the housing benefit people know because it made no difference to my income, therefore I thought wouldn't affect my entitlement.

Recently I got a small pay increase so wrote to them and sent the details, so they could re-calculate my benefit. They checked with tax credits and were told my payments for april 2009 - sept 2009 were a lot more than I told them. Obviously because it included the element that was for childcare - not for me!

I went in within a few days of receiving this letter and supplied the paperwork to show the extra was the childcare element and not my income, so I have paid the correct amount of rent and received the correct payments. They said a re-calculation would be done not including the extra childcare part as obviously this is not part of my income.

I am fuming - got a letter today saying I let them know too late of a decrease in my payments so I owe them nearly £2000! (based on income I never had.)

This just seems so wrong to me - I didn't ever let them know about a decrease. I didn't let them know I was receiving the childcare element, but this would never be included in any calculation anyway. They have just mistakenly retrospectively included it in a back dated calculation and then within a week I have provided them with the paperwork to show what it was - ie not income. How can they retrospectively say I owe them money when the calculation was correct in the first place and I have provided them with the relevant details to prove this money was not income.

It just baffles me and I am struggling to understand how they can do this - I could understand more so if I had paid too much and was now saying that due to the childcare being included they owe me, but this is crazy - I have paid the correct amount - they made a mistake in May of this year including those amounts as income and I showed them immediately proof of this not being the case.

Anyway sorry - so long, hope it makes sense! Can they really do this???

They are asking me to pay them money I never had. :(

Would be really grateful if anyone knows whether they really can do this.

Thanks for reading! :)

I'm a bit confused. How is this not income?

I got taxable excess fares from work, to compensate me for moving to an office 20 miles away. Yet both Tax Credits and the Student Loans company considered it to be my income and reduced my TC/increased the amount we were supposed to contribute to the DC based on this supposedly extra income.

I'd have thought this was the same?

It's all income. I use my wages to pay for childcare but they're still my wages.

When you return to work as a single parent you are entitled to 70% of your childcare costs paid - tax credits pay this to you - the exact amount to be paid to the childcare provider and the other 30% comes out of my wages. Therefore how in any way is it income - It is not my money it is money they are paying for me for my childcare. If it is included as income then they are not paying 70% of my childcare - surely?? If this was included as income despite it obviously not being then I'm sure lots of people returning to work would be left worse off and all of the calculations they do would be wrong - tax credits pay 70% of your childcare for you - not pay you that money then it be taken as rent - that just wouldn't make sense!

I hope you understand better now what I mean?

The calculations done for me by the job centre did not show this as income and when you think about it I do not see how it in any way could be thought of as such - it is money for childcare to enable me to go back to work - if they are going to take it in rent - then I am getting no help with childcare in order for me to afford to go back to work am I?

well, you should of told them. they should have asked you for childcare costs and deducted them from your earnings. you've just done it in a round about way. the end figures should be the same.

I cant see how you owe them money though.

make sure you write an appeal letter immediately and take it into the housing benefit drop in centre or office if you can.

Thank you - Sorry my explanation might not have been great!

I did make a mistake not telling them, but thought I only needed to tell them of a change in my income, as I did when my wages increased. They only noticed the extra payments on May 17th though and I went in as soon as I received the letter 4 days later with the paperwork to show them it wasn't income. So I don't see how they can then say I owe them money, based on what was never income in the first place. My payments are all correct and up to date based on the original calculations as this wouldn't have been included anyway.

I will do a letter of appeal asap and might go to citizens advise too, just to check.

I am just worried they have a clause somewhere to make this ok for them to do. :(

Did you get a new tax credits award? I am not an expert at all (being a new claimant of housing benefit) but whenever I get anything new like an amended tax credits award, or a pay slip (as I am do seasonal work which is never guaranteed) I am taking it along to the benefits office as then I know that they have all the information.

I agree that the extra tax credits weren't income, but it was a change in circumstances which I think you are meant to tell them about.

Hope it all works out smoothly - is it possible that letters have crossed in the post so that they have sent one out before getting your letter?

Thanks LawrieMarlow! You are right - I should have let them know. At the time I was pre-occupied with sorting it all out, new job, sorting out childcare etc and it just didn't occur to me that it was something they would need to know, as I knew it wouldn't affect my entitlement. I have learnt a lesson though and from now on will tell them about any change in my circumstance regardless of whether it will affect my claim.

No chance of crossed letters unfortunately - I waited nearly 5 weeks for them to look at it and come back to me.

I am starting to think I'll just have to pay it, but it's a lot of money and it just feels so wrong that they can take something into account 2 years down the line, that shouldn't be taken into account iyswim. I'm pretty sure though that I will have to pay it and that they haven't made a mistake - I'm sure they know what they can and can't do. Whether I can afford it or not is a different matter, but I'll just have to find it I guess.

Thank you all for your replies!!

On the hb form there is a section for your tax credits and then a separate section for you to put childcare costs in. They deduct childcare costs from your income - you will need to show/send them childcare receipts/contracts.

You Won't owe them £2000 once they do this.

i know this is an old messagwe did it get sorted i went bact to work in june they are caluculating my working tax credit that i get for my childcare too this leaves me with a sort fall in money and now im living on less than benfit. ive been tackling this for 3 months and still they dont disregard my childcare . it really makes being a single parent even more stressfull