Tax credits - what if I get a job later in the year?

[WoodsfortheTrees]

Right, I've really worried myself after talking to a friend so I wondered if anyone could help me please?

I'm on maternity leave at the moment and have around 15 weeks of SMP left. I won't be returning to work afterwards as it won't be worth it with the cost of childcare. This means when I applied for tax credits I put down DH's annual salary and then my 15 weeks as SMP as my income.

I was talking to my friend about my worries that we won't manage on DH's money alone (we've always both worked so this is new territory for me) and off-handedly said something about looking for part time work in a few months if it doesn't work out.

She then scared me by saying we would need to pay back all of the child tax credit we get based on my SMP income as my estimate for the year would be wrong and they would have overpaid me. Is this correct? I'm now worried that we will be faced with a big debt if I do decide to get another job in a few months but at the moment I don't know what will happen.

Surely they understand that situations might change, don't they?

You would need to let them know asap when you get a job ,and try to estimate what you might earn for the rest of the tax year. They will then reduce your tax credits accordingly but yes you may still end up with an overpayment if you don't keep them updated.
Any overpayment would then be reclaimed from the following years tax credits.
As long as you keep them updated of any changes and try to give an estimate then you should be ok and any overpayments will be minimalized.

As a tip, when you inform them (if it's over the phone) make a note of time, date, who you spoke to and what information was given. I did and when I disputed an overpayment, that recorded phone call was the difference between winning and losing

Apologies for not coming back sooner, thanks for the advice.

I would certainly let them know straight away. Problem is that if I do need to work again we probably wouldn't be entitled to any tax credits (we don't get much now) so would they ask for any overpayment straight away?

Thanks for the advice shakey will definitely remember that. When I spoke to them over webchat about my maternity pay I took screenshots of what they said just in case

Many years ago when we reached a point where we were no longer entitled to tax credits they did demand a whole repayment back in one go but we managed to negotiate to pay back over a period of time.
If it's only a small amount you are getting and you think you might need to pay it back then perhaps it would be better to save it in a savings account. I guess it depends how much you need it now.

When I rang tax credits to tell them I wasn't going back to my job after maternity leave I told them I would be looking for a part time job to fit around Dp's work. They said in that case they would put me working 16 hours as an estimate or there would be a over payment to pay back if I got a job.

That's very odd Pepper as you'll still have an overpayment as it goes on income not number of hours worked.

Even if there's an overpayment and they ask for it all back at once, they'll let you negotiate a repayment plan.

It was the income from 16hrs at nmw I think.

This is the flaw in the tax credit system.

Imagine if you had to pay job seekers back.

I guess this is why it is going to universal credit.