Tax Credits - Pension Contributions

[MrsChiefTyrell]

Does anyone know about this? My partner is the only wage earner for the household. He pays into a pension direct from his salary each month - about £500 a month.

I was told by staff on the helpline (and it says the same on the online tax credits calculator) that the figure we should give to tax credits as out full household income is gross pay minus pension contributions.

We've done exactly that and just had a letter through to say that pension contributions aren't supposed to be deducted and therefore our award is much less than we were told it would be as they've added the extra £5,000 onto our household income for last year.

Can anyone explain thsi to me as I'm confused. Tax credits helpline staff weren't able to explain it and I'm not sure what else to do.

It depends whether the deductions are made before or after tax is calculated. If you look on a payslip it should show his pay and also his taxable pay.

If the taxable pay is the same as his pay then you should be able to take away the pension contributions from the amount on his P60. If the taxable pay is £500 less then he has already had tax relief and the amount to declare is the P60 figure without deducting the pension.

You can also check with his employer to find out what sort of pension it is

Tax credits should have been able to give you a proper explanation. But I wonder if it's to do with the size of his contributions. £500 a month to a pension is very high so I'd imagine he will be paying additional voluntary contributions . So perhaps you are allowed only so much pension contributions to be deducted from the salary when assessing for benefits. I'd get in touch again.