Tax Credits Loophole - do you have more than 2 children?

[CarrieLouise25]

I thought I'd start a new thread on the Budget, and the brutal cuts to tax credits.

I spotted this loophole yesterday, and had it confirmed today by reading this article here:

www.mirror.co.uk/news/uk-news/budget-2015-tax-credits-loophole-6035314

The most important bit being:

*It shows many big families are likely to be hit despite already having three or more offspring before April 2017.

A loophole will count families as a 'new claim' if they've had a 6-month break in claiming tax credits.

And those who already have three children - but who claim for the first time after April 2017 - will also count as a 'new claim', meaning they only get paid for two children.

That means anyone who lifts themselves out of poverty for a long stretch but then loses their job again will lose thousands of pounds.*

Although it says families who currently have 3 or more children won't be hit, as it's only for new claims after April 17, claims become 'new' when there's been a break for 6 months or more.

So say you're currently with 4 children, both working hard (but low pay) and you tax credits top up means you get by. Then somehow you get either more hours/higher wage/better options etc and you don't need the TC's anymore (which would be fantastic right? we all want better wages and not have to rely on TC's) and life is good. Then maybe that job doesn't last/something happens...and you have to rely on TC's to top you up again, you'll only get them for 2 children.

These cuts are atrocious and will send a lot more people into poverty.
Unfortunately some of us have been dealt double blows, I'm in an unfortunate position not to have a mortgage yet so we are council tenants and have now been informed in the new budget that U.S. 'high earners ' (apparently £30000 was high to george osbourne in the budget, however has been deemed low enough to get certain parts of working tax- work that one out !) will now face 80% of the market rent for our property.
Whilst hearing the reduction in tax credits we face (approx £55 a week ) I knew at a push we could tighten our purse strings and manage, to then be told our rent will be going up is going to be quite a struggle for us.
On the bbc and guardian calculators for us to be better off, I would have to be earning £22500, which is double what I earn now. That will never happen.
I work 30 hours, dh 43, I cannot work anymore hours due to relying on pils to babysit which they do 4 days a week which I really appreciate, however they have a life of their own and I don't want to rely on them more than we do. :(
I know the next reading of the budget is July 21st (iirc) hopefully local MPs will kick up a fuss and george osbourne opens his eyes, can't see that happening :(

Zazza, that is horrendous. I'm so fucking angry about this, if they'd cut tax credits when we were claiming I literally don't know what I would have done. Give up work I suspect, how could I possibly have paid my childcare? Fucking wankering tossers.

On the other hand my cousin who has the same family set up as me (her,dh and 3dcs 1 of whom is disabled) has never worked a day in her life nor has her dh, but are sitting very pretty.
She rakes in (including housing benefit and council tax ) £32000 a year she is exempt from the cap due to her sons disability and is also due a 4th child which will then allow her nearly an extra £3500 a year.

How on earth can that be fair ?

Beans- yes, having a disabled DC is never fair.

Do you have a disabled child too zazza?

Im not saying it's not fair, I would NEVER a say that after having a disabled son myself, but it's her son with the disability not her or her dh. She has even admitted that she would be screwed if her ds wasnt entitled to dla. She quotes she would lose £12000 a year if she wasn't exempt. £12000 a year !! I don't even earn that working 30 hours a week.

I agree it sounds though

But the state can't afford to supplement any more - look at how gross debt is increasing and the projections for a better debt/ GDP % are being pushed back to further years.

I think it's a shame families are bearing a lot of the brunt and pensions are such a giant share of the debt but everything to do with over 60s are protected

Yes, my 12 year old son has cerbral palsy.

Yes a lot of people solely on benefits are affected by the benefits cap but working families are affected even more, as previously mentioned some even dealt double blows.
In a way the goverment are biting the hand that feeds them ( taking more money from us working to give to less fortunate)

It's just so annoying and Idoubt anything can be do to prevent it happening

Pensioners are protected probably because the majority of votes come from older people.

patchesofhappiness - Sorry to hear about your situation. You should look at whether it would be beneficial for you to work 15 hrs or less per week.

If you work less than 16 hrs a week, you wouldn't be eligible for WTC, just CTC (which you would receive the maximum amount of i.e. £8,885 for 3 DCs as long as you don't earn more than £12,125 next year). If you are a CTC claimant only, your DCs would also be eligible for free school meals, pupil premium & you would get free dental/optician/prescriptions.

The way I read it, if your job came to an end, for example, that wouldn't constitute a break in your tax credit claim, because you'd carry on just claiming CTC. Obviously you'd need to check all this with an adviser, but just thought this might be a way you wouldn't fall foul of this sanction.

Must be tough zazza to see that then. But what will happen when her son grows up and she's not entitled to money etc for him? You're in a better place long term I guess.

Very toughrj there Ds is only 5 so they got a good few year left of reaping all the benefits.
There is no sihpgn of her dh getting a job, I mean he would have to be earning over £40000 to bring home anywhere near what they are used to getting.

Zazza something doesn't add up with your sisters situation. Only one adult can be your dn's carer. The other adult must be disabled themselves and claiming ESA or JSA they can't both claim IS.

TheWomanTheyCallJayne - you asked how to keep a claim open if you're just over the thresholds. One option is to sacrifice some of your salary or pay more into a pension (or start paying into one if you're not already). This would reduce the figure that tax credits calculate your claim on, allowing you to keep the claim open, even if it's only for a small amount.

OP I don't think that's an accidental loophole. It's just a stealthy way of applying the two child policy to all families. It'll just take a little while to catch every poor family with a new claim.

andnow
It's my cousin, she claims carers allowance for her son. She then claims income support for herself and her husband (normally the man would claim but he used to take off for days on end and leave her with no money, so income support put her as main claimant)

Her dh is fully aware the 'one day' he will be made to look for work.

switchitoff thank you, that's definitely worth thinking about. I feel very vulnerable not working, and also a bit guilty, despite my current situation.

There's no doubt that, following this budget, I'm better off on benefits in the short term. Still, I have the future to think about, and also I'm worried about the message that not working is sending to my older boy.

StormyBrid, I think you are right, it's not an accidental loophole

I wonder if Mr Osborne and his mates have consciously thought about the division and bad feeling this policy is going to create within communities like mine. The majority of seriously hard-working people on minimum wage are going to look very askance at the small minority who choose to stay on benefits because they don't want to put their kids in full time childcare and work 30 hours for the princely sum of£20 a week. They are seeing us against each other... it's the old divide and conquer principle.

Elizabeth-

I rang them today to do my renewal. She said as long as I put in an estimate for next year they'll keep the claim open. I guess we're not the only ones who fluctuate around a cut off.

StormyBrid

You're absolutely right. I was just worried that everyone with more than 2 children felt protected, because they were selling the 'current claims are safe' bullshit.

I wanted to make sure the Tory small print was out there.

Carrie, the posts I've seen in all sorts of places over the past few days suggests that an awful lot of people think they'll be entitled for as many kids as they have before 2017. An awful lot of people are going to be in for a nasty shock.

Zazza sorry, cousin. I didn't realise it worked that way and you could claim IS for your partner.

and yes she gets the carers plus some is for both of them iirc the carers is over £120 a fortnight

The income support I should say Is over £120 a fortnight

Zazza, carers allowance is £62.10 a week. I know this because I claim it for ds1, who gets middle rate dla. Income support is reduced accordingly (I get £90 a fortnight). It's enough, with the current rate of tax credits I get, but it's hardly the life of Riley, is it? Especially if you are trying to pay the mortgage rather than selling up and claiming housing benefit...

I'm on income support (single mum) because ds1`s care needs make it difficult for me to work, and Ds2 is still very young. I will work as soon as I have figured out how to do this while keeping my children emotionally and physically safe, but my situation is very new to me at the moment.

You sound like you resent your cousin claiming dla for her child. Are you saying we don't need the extra money to care for our children? I don't know how I would cope with Ds1`s health needs if he didn't get dla.

I've no idea what sort of a person your cousin is, but I hope you're not judging me and everybody else on income support/child dla/carers allowance just because you don't like your cousin very much.

Sorry Zazza, been thinking, and realise I sound horribly defensive. You have lost more in this budget than me. I've lost my financial incentive to work, and am worried about losing in the long term if there is abreak in my claim for tax credits, but I've had little taken from me in the short term so long as I sit tight while I think. I do understand that it must be very frustrating to see people like me not working and still able to feed the children in exactly the same way as somebody working 30+ hours a week.