Tax Credits

[BigGrannyPants]

I am a SAHM. I have a 6yo DS and 1yo twins. Had to give up work after mat leave as child care for 2 was more than I earned by a mile. My DH has a well paid job, but we have loads of debt. We were getting by as we were getting Tax Credits and Child Benefit. Nothing has changed between last year and this year financially, they cut my TC by £80 per 4 weeks which is a lot to us. I called to talk about it but they couldn't tell me why and said wait for renewal, then it was cut again by another £20, then a week later another £20. I got my provisional award in at this amount, then a day later it went down by another £50. Which means in total it is gone down by £170 per 4 weeks, this is a disaster for us. I called again yesterday and she went through all the details again, confirmed all correct and said payment will stay the same (the minus £170 figure) until I get my renewal through. My next TC payment is due in 6 days. I checked my online account today and it's gone down again, this time to zero! I'm panicking and they are now shut for the weekend. How can they do this with no explanation or warning, this is the difference between us eating for the next month or not! We have already had to switch the heating off, I'm in a real panic and need some advice please. The only notification I have had is the provisional figure mentioned above, all the other ones I only found through checking my online account.

HMRC do have a habit of reducing payments before they send you about ten brown envelopes through the post telling you why.

Sorry @Babyroobs I see what you mean, I was just tagging on to a post that I see now was meant for @Shopkinsdoll. I wasn't entitled to tax credits before that as I was working full time, so last year was my first year claiming since DS1 was born in 2010 so they have no reason for getting it wrong.

I'm in the midst of trying to set my own business up as it's hard to get a job that fits in with DHs hours and the kids so hopefully I won't need tax credits for much longer, but at the moment they are our lifeline!

@lougle thank you! I have saved your calculation and I will save the link. MN is an amazing place full of amazing people! My twins were born July 2015 so I was on mat leave from June 2015 to June 2016, only received stat mat pay so I think it's about £140 p/w ish? I think that stopped in February 2016 and then I was officially unemployed from June 2016.

There should be a leaflet on the tax credits page (the one that gives the date of your payments and amounts) which allows you to get hardship payments if your level has reduced- I filled it in and got some reinstated.

There was @wannabestressfree but I really don't want to owe anyone else anymore money, plus our hardship is our fault because of our debts, we would be comfortable on my DHs wage if it wasn't all going out on debt so I'm not sure they would look at us favourably

So during the tax year 2016-17 your dh earnt £32k and you earnt nothing. This should have given you tax credits of £244 for the whole of that tax year.
However it seems that for most of that tax year you were getting £317 a month until it dropped in April of this year.
I think you've been overpaid quite a bit for tax year 2016-17.
Hopefully you can plead hardship and negotiate lower repayments. I think they are only allowed to take back a certain percentage from your current award.
When my kids were very young and we got some tax credits we suddenly weren't eligible for them any more and they demanded the whole repayment back in one go. I remember being in tears on the phone to them as we just didn't have £800 spare to pay back.
They eventually agreed to let u s pay it back at £25 a month for 3 years !

So when did you start claiming tax credits? If you started claiming during your maternity leave, the first £100 per week of your SMP should have been disregarded.

Didn't start claiming until my twins were born at the end of July but I think payments were back dated and I assumed that was why they were higher as it was spread over less time?

Just checked, got my first payment in August 2016, I suppose that explains the reduction

I don't understand why they started the payments so high in Aug 2016 it doesn't make sense. Unless they had your income figures down too low or something. Could be an error on their part.

Yes, it's possible that you had an overpayment from 2016-2017 of £317-£244=£73 every 4 weeks. That would give you £73 x 13 = £949 overpayment for that year, plus you say that you were receiving the same until the new year of this year, which would be 8 months, so 2/3 of the year.

£949 ÷3 × 2 = £633 approx; total £1581.

But the good news is that they've already taken back some of your overpayment, as harsh as it has felt. So the actual overpayment will be nowhere near as much as that now.

If it's any comfort, we got a letter saying 'we've noticed you have an overpayment of £1000. We're going to sort that by stopping the payment due to you tomorrow and all further payments. Well restart payments at a pitiful rate in April, then in August move them to subsistence level. Good day!' I nearly stopped breathing as it was a third of our (low) income. There is a reason I'm so good at Tax Credit calculations!! But we've survived it.

@Babyroobs they back dated the payment til May I think, I'm sure they only backdate up to 3 months, which means I got 11 months of payments but over 8 months so they would be higher? I have no idea if that's right or not, I'm winging it

I see yes that would make sense.

 @lougle so sorry to hear that! I hate HMRC! Actually I hate money.. that sucks, something like that would sink us.

We are incredibly fortunate in a lot of ways, we just can't get to grips with money

They should still explain it though so that it doesn't come as such a shock !! They could explain that you were getting a higher amount due to back pay and that t will likely reduce to X amount at the end of the tax year if income stays the same.

Can you speak to stepchange or similar and try to get your debts to a more manageable level ?

@Babyroobs it's very difficult any formal debt arrangement could affect my DHs job, and since he is the highest only earner we really can't take any risks

I see, well hope things improve for you soon.

Thank you @Babyroobs, thank you all for your help tonight. I feel less like crying now! 

Has his income increased in recent years and they are still basin it on a previous figure? That could result in an overpayment. Good luck and hope you get it sorted out.

Here is tax credits calculator if you want to check what you are meant to get.

www.gov.uk/tax-credits-calculator

You may be able to get the following tax credits.
I put in details based on 3 children and DH income of 32K and it came up with-

This is based on the details you have entered, and could change if your circumstances change.

Child Tax Credit

You could get

£245.01 every four weeks
towards your household costs

Working Tax Credit

You could get

£0 every four weeks
towards your household costs

How you qualify
This is based on your household income of £32,000

Which is what Babyroobs mentioned as well. It looks like maybe have a overpayment and they have reduced to the end of this year. Would think you would till get TC in the next tax year though. We had an overpayment a couple of years ago and they do usually take it back over quite a while. I would do an online chat, perhaps. So, say for example it may be around £200 instead of £245 for a while. If it is their fault though you might not have to pay it back.

Maybe after the renewal is done it will be easier to check. there is an online renewal service where you can view payments online etc at

www.gov.uk/managetaxcredits.

you need the number off the renewal pack to start it though.

BigGrannyPants, I also have some debt which is mine from before I met DH. I have a debt repayment plan with Payplan, they are very good. It doesn't affect his credit because it is my debt not his.

maybe have a chat with them- they don;t push you into anything and are a charity not money making company, they can talk you through options. They froze the interest with me, it has really helped.

they are similar to Stepchange.

www.payplan.com/?category=BRAND&keyword=payplan&gclid=CjwKEAjw3drIBRCOwfC-_qqyjQ8SJADvoWQpK_k-v6iCArbvAygJ9ml0sRujKwj2T3GECQauRs7VvBoCp8vw_wcB

Sorry saw about your husband's job might be affected- well Payplan would be able to say if it affected him at all but what they told me is it doesn't as it is mine from before marriage.

You have my sympathies OP, I've been there before! We had one month where ours got cut by £200 in one month, the first we knew of it was when our weekly payment came in and it was less than half the usual amount.

Calling them up and got the most unsympathetic woman in the world who said that was our new payment amount, we scraped by and had less than £1 in the bank by the next month.

Another phone call to them (where I was literally crying down the phone because we could only just cover our bills) and the guy explains the cut was temporary due to an overpayment and that the amount was due to go back up it would have been nice to know that BEFORE they cut the payments to give us some time to plan!

And now we're having the same thing again, weekly payment more than halved and when I phoned to ask why the man said he wasn't sure but he thought it was due to me changing jobs mid year (I phoned them up and told them straight away and our payments were reduced the next week to reflect my wage increase) but he said he couldn't be sure until we had done our renewal.

So HOW can you claim money back for an overpayment when you don't actually know if we have been overpaid?! Pretty sure we haven't, as we put in DPs expected income as more than £1,000 than it actually was, so how can they have overpaid us?!

Sorry, huge rant, but I cannot wait for the day we aren't able to claim for tax credits!