Reducing work hours tax credit

[Mrsdave76]

Hi.
My husband is having to reduce his hours at work from 30 hrs per week to 25. How will this effect our tax credit payments?
He is the only one currently working and we have four children.
Thanks xxx

You have children

If you're responsible for children you need to be aged at least 16, and work the following hours to get Working Tax Credit:
• if you're single, you need to do paid work of at least 16 hours a week
• if you're in a couple, your joint paid working hours need to be at least 24 a week, with one of you working at least 16 hours a week

HMRC website

But will him having to reduce his hours (due to his company restructuring all the staff) mean that we will get more tax credits. Or will they stay the same. Starting to worry about money now and I'm trying to get back into work myself.

It will depend on how much your income drops. I think there is a certain amount it can drop within a year & they don't pay any more but not sure what it is. I'd give them a call to ask.

As a single parent my tax credits go down a little when my hours fall below an average of 29 per week.

www.hmrc.gov.uk/taxcredits/payments-entitlement/entitlement/question-how-much.htm this is a link to a tax credits calculator: you can put in your current and expected income and hours and see the results.

But to be honest your child tax credit is probably much more than your working tax credit with 4 qualifying children.

As long as his hours are at least 24 per week you'll still be entitled to WTC (or 16 hours per week if the non worker is disabled or in receipt of carers allowance)

It will reduce though as you get an extra element of WTC for working 30 hours per week or more.

At the moment your award will be based on last years income so the income change won't affect it UNLESS you give them an estimate for the current tax year which is over £2500 less than last year. However underestimating current year income is one of the most common causes of overpayment so you need to be really sure of your figures.