Help with working out tax credit/benefit entitlement

[Lj8893]

Hi,
I'm currently about 10 weeks pregnant and yes it is a while away I know but I like to be organised and prepared!!

Me and my partner both currently work full time but on low incomes. I will qualify for smp. However I do intend to resign from my job at the end of my maternity leave as it will not be possible for me to return part time which is what I wish to do.

We will be living in a private rented house (roughly at £650 a month)

My partner will continue in his job at £14000 a year.

I hope to gain part time employment locally at which I expect to earn minimum wage at about 15 hours a week.

I have used the direct gov and turn to us calculator but they work it all out based on the previous years earnings which doesn't relate to what our earnings will be once baby is here.

Can anyone help advise me what we should expect to be entitled to?

Ps. Pleaseeeeee no benefit bashers!!! We are just a small family trying to get by and provide the best possible life for our future child.

Hi it's because you will get tax credits based on your previous years income having a baby will not change that.

Oh ok, even though our income will have changed?

You could just put in what you estimate to be earning and it will give you an idea but remember it will the next tax year that you'll get this.

Forgot to add that's for working tax credit you will get ctc of approx £50 a week and cb of £20

Yes even though your income has changed they are not interested until the following April then they will work it out on your new income

Ok, so when we make the application, I guess around August time what tax year will they be looking at?

Actually Pearly is wrong.

You apply based on income earned in 2012/2013 if you're applying in August. You then call them and tell them an estimate for you income 2013/2014 and they will adjust your claim. They have an income disregard of £2500 so if you earn £6000 less in 2013/2014 they will class it as a reduction in income of £3500. Hope that makes sense!

It will only be an estimate, but if you go on www.entitledto.co.uk and type in your household income as though that's what you are currently earning (remember to increase it by the £2500 though!) that will give you a rough idea of your tax credits. You can play around with different income thresholds as well.

Rockchick I gave them an estimate of current tax year (as I'm on maternity leave) and they completely disregarded it?

They sent me a letter saying 'your tax credits award based on 2011/12 income is x amount, as of April 2013 it will be xy amount based on an estimated earning of [insert amount £3000 higher than 2011/12 income]

That's what I said, for the previous year which is half of 2012 and half of 2013

Yes even though your income has changed they are not interested until the following April then they will work it out on your new income

This is the part that is incorrect - as I said you can call them as soon as your claim is awarded and they will adjust it then based on your expected income.

Spotty if your income will be higher, the disregard is £5000, is that what you mean?

No they should be able to.do.your claim.based on your current income.

It is a bit of a pita tho.

Depending on your income you may get working tax credit and obviously you will get child tax credit.

Mnet has its own calculator to do with the changes to universal credit. Put in incomes on.there and it will tell you what you should be entitled to :)

Thanks all, it's becoming clearer to me now!

5egg where will I find that calculator?

Here is the calculator >> www.hmrc.gov.uk/taxcredits/payments-entitlement/entitlement/question-how-much.htm

I think SMP is disregarded as income (might have changed but I haven't heard that it has)

No they've estimated it £3000 higher even though I told them it will be about £4500 lower. I know all I need to do is update when we get our p60s but it seems a ridiculous thing to do, especially when I told them and it's not like anyone is getting pay rises these days.

Thanks I've had a look, I didn't realise that smp is disregarded as income, that's useful to know as will make 2013/2014 income a lot less as will start maternity leave beginning of August. So would that make that years income only my full time wage from April-July?

Sort of, you can't disregard the whole of SMP I don't think, there's an allowance but I can't remember exactly. I think it's £100/week

they disregard £100pw of smp for 39 weeks.
they will base your initial claim on last years income then when your award comes through saying you are entitled to £xx you then phone back and say your circumstances have changed and projected income for 13/14 is £xx and then they award you again. pita but worth it.
i use the online calculator with my projected income rather then what they ask for just to get a rough idea.

Brilliant Thankyou :)

Tax credits are going soon so its never wise to base finances around them. When UC comes in, both parents have to meet a certain criteria to qualify and 15 hours a week may not be enough.

Just to add , you won't be able to get any help with childcare costs if you are working 15 hours, as it has to be 16 hours or more. not sure whether you are aware of this, I guess perhaps you are planning on fitting the 15 hours around your partners work.

We were planning to fit our hours around each others (which will help as my partner works for his very understanding mum!) so that shouldn't be a problem. Of course it will depend on the job I manage to secure.