Returning to work after having a baby and changing flat - please help with benefit results

[2013vanessa]

Hello everybody,

I am returning to work in a few months. We are a couple with one child under 1 and we need to move flat and we are looking at 2 bedroom flats.

We are both working and together we earn 30000K gross/year, we will pay 200 pounds month for childcare and the flat rent would be 1100 pounds month. We live in London (Hounslow borough).

I have used turn2us online website to find out about the help we could get and the results are:

Tax credits and child benefit: 90 per week
Housing benefit: 109 per week

The amount of tax credits is confirmed but my doubt comes with the housing benefit. It seems a huge amount to me. Please anyone can tell me is this makes sense?

I have also used Hounslow borough online benefit advisor and the result is the same.

Thank you so much

If it's the housing benefit you're querying I'd have thought it's worth taking a morning out to go in person to the housing office and ask their advice.

The tax credits sound high to me. You would only be eligible for the childcare element of tax credits and taking off child benefit , you would be getting £70 a week tax credits which is more than your childcare is costing per week. The only explanation I can think is that your earnings were a lot lower last tax year?

Ok, Tax Credits:

Working Tax Credits:
Basic element£1,920
Couple and lone parent element £1,970
30 hour element £790

Total: £4680

Childcare element:
£46 per week (your actual fee) x 70% = £32.22

Child Tax Credits:
Child Tax Credit Family element £545
Child element £2,720

Total: £3260

Grand total: £4680 + £32.22 + £2720 = £7432.22

Then the deductions:

£30,000 (your income) - £6420 (allowance) = £23,580

Withdrawal rate is 41%, so £23,580 x 41%= £9667.80

£7432.22-£9667.80 = -£2235.58 = £0.

So you'll get tax credits this year, as your income was lower because you were on maternity leave, but once you've been back at your normal wage, the following renewal will see your tax credits drop to £0.

Housing benefit:

Couples Allowance: £112.55
Family Premium: £17.40
Earnings disregard: £10
Child allowance: £65.62
30 hr disregard (WTC) £17.10
Child care costs disregard: £46

Total allowances: £268.67

Income: £23217.76 (after tax/NI) = £446.50

£446.50 - 268.67 =£177.83 'excess'

65% deduction rate for excess = 177.83-65% = £115.59

£115.59 is what you should pay towards your rent, so about £138.00 in housing benefit should be payable.

That's if your rent is within the allowance set by your LA. There are 3 BRMA (broad rental market areas) within Hounslow, ranging from £219pw -£295pw Local Housing Allowance for a 2 bed house lha-direct.voa.gov.uk/SearchResults.aspx?LocalAuthorityId=18&LHACategory=2&Month=12&Year=2013&SearchPageParameters=true

Note: That's when you're fully back to work and the renewal is based on your £30k joint income.

Your results now may be right...we'd have to know your likely joint income for this year/last year to work that out.

Sorry, childcare is 200 pounds per week, it was a mistake!

I wanted to write "week" and I wrote "month", sorry about that.

Ok, taking off my mistake in saying '£32.22' when it should have been £32.22 per week, and putting instead your £200 per week, it changes things slightly:

Cap on childcare costs for 1 child is £175 per week. So your max childcare costs that can be claimed is:

£175 x 70% = £122.5 per week or £6370 per year.

That takes your total amount up to £13770.

Your withdrawal was £9667.80, so the remainder is £4102.2 per year or £78.89 per week.

As I say though, it's all academic because you need to know what you're doing for this year and next year, so you really need to get a proper assessment from the council/HMRC, because the worst thing would be to commit to a flat/house you can't afford long term.

Hi lougle,

So, if I am not wrong, 78.89 per week would be the amount I would get for tax credits? (not including child benefit?)

And 138 per week could be the HB? (which I need to confirm with the council of course)

Please correct me if I am wrong, I am bit lost with so many numbers...

Thank you so much

It's possible, but you really would need to check with the council and HMRC what the situation is before you get too committed.

I know, I will do it

I just wanted to make sure that I understood your numbers.

Thanks a lot again!