Major drop in income coming soon - any advice please?

[Littlebluebird123]

My DP has resigned from work due to a toxic work environment. He was sole earner. I am SAHM.

I have a job set up to start from about a week before his notice period is up but it is a pretty huge drop in salary.

Currently he has the married person tax allowance but I'll need that to be the other way around. Is it possible to do for part of a year or does it have to be for the full tax year? I'm only on a temporary contract and the hope is that he'll find another job before that ends.

We receive CTC as we have 4 DCs. How quickly can the change in circumstances be updated? Ie is it likely that this will give a bit of help to lessen the blow? Or will it take ages?

As he's resigned, he isn't entitled to claim UC. Does anyone know how long before he can? And if he does, does this mess up our CTC claim?

I'm already going through the finances with a fine toothcomb to weed out unnecessary payments - sky etc type stuff.

Just need a bit of help on what else I can do. And no, he is in no fit state to apply for other jobs at the moment and my job won't leave me with spare time to have a second job.

He could apply for contribution based JSA if he has enough national insurance contributions. However they will still expect him to look for work on this. They may delay it a bit if he has resigned but he would need to ask about that.

www.citizensadvice.org.uk/benefits/help-if-on-a-low-income/jobseekers-allowance-jsa/before-you-claim-jsa/check-if-you-can-get-jsa/

If he is signed off work by the Doctor then he could claim contribution based ESA instead:
www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/employment-and-support-allowance/before-you-apply-for-esa/eligiblility-for-esa/

Are you in a UC full service area? Do you rent? If you do then you may be better off on Universal Credit, if not then you probably won't be. But its worth checking. Once you go to UC you cant go back to CTC. If you qualify for extra help eg help with housing then that would take you onto universal credit.

Married Tax Allowance - yes this works on a year by year basis April-March. However depending on how much you earn before April you may still be entitled this year as you only actually transfer £1k (I think) of your personal allowance anyway so unless you earn over £10,000 and a bit before the end of March then for the current year it would still be OK the current way round, then from April you would need to change it round. Your husband may also get a tax refund for this year if he stops work now (although probably only a small amount and they might just change his tax code to reflect it). Does that make sense? Not sure I explained it very well!

This maybe useful

www.moneysavingexpert.com/family/money-help/

Just wanted to chip in and say that we have been through lean times as a family and we always managed somehow. You just change your parameters, and realise how much you can actually do without. Good luck with this.

Thank you.
We are in a full UC area but having more than 2 children we haven't switched.
I will investigate whether he can go for ESA. He isn't currently fit for work.
We have a mortgage so that seems to count us out for lots of support really. :(

Thanks for the link jackshouse. I have already done lots of the suggested things but there are a couple I hadn't thought of. :)

Anyone any ideas about the tax credits change? I'm looking at over £1000 less income a month at the moment which I'm really going to struggle to claw back from minimising costs. Savings will only last 2/3 months at that level so anything I can get to reduce the difference buys him more time to get another job.

@Mishappening - thank you.
Just a bit overwhelmed at the moment.

You might be able to arrange a temporary mortgage break or go interest only as a short term measure.

Are you in a UC full service area? Do you rent? If you do then you may be better off on Universal Credit, if not then you probably won't be
You have that the wrong way round. Even so I would not advise claiming UC.

MyDcAreMarvel Why the wrong way round? - If they are renting and need help with their rent in a UC full service area then they will have to claim UC to get that help. So better off claiming UC. If they don't need or don't qualify for help with rent, then they will almost certainly be better off staying on TC as its generally more generous.

To the OP - to see what extra you may get on your TC you can put your figures into a benefit checker like Entitledto. TC won't recalculate mid-year unless your income drop significantly - I think by over £2k, so again you may not get any more income from TC this tax year. As you may be aware already TC are a complete pain so who knows when you will get more money, so I would try and make sure you don't have to rely on an increase any time soon.

Appreciate that you’re tightening your belts, but if your DH has been forced out of his job, would you consider seeking some legal advice?

You may be able to get UC even if he has resigned , he may not be sanctioned if he has a good enough reason for resigning. As above if you need to claim help with your rent then it will be Uc you need to claim. Or he can look at contributions based ESA ( new style esa) or new style JSA.

Thank you all.

I've checked entitled to and according to that we'd be 5 a month better of on UC. But I wouldn't be able to go back and if he's able to get a job on a more comparable salary then I'd lose out - they must have slightly different criteria than CTC currently have.

The salary difference is well over 2500 a year so it does look like I'd be able to get them to reassess. Thank you. Even if it takes 6-8 weeks I can cope with that as we do have a little saved.

@Notthatsimple thank you. We'd have to go for constructive dismissal and although the union is willing to help, the rep said it's really difficult to prove and it's unlikely we'd have support from colleagues. (As they're terrified they'd lose their jobs too.) It would also take a while and he's just not in a place where he'd be able to cope with the fight sadly.

I think ESA might be the way to go from the gov website. I'll ring them tomorrow and see what they say. Can't hurt to ask I guess.

@dirtystinkyrats because the work allowance is higher under UC if you have no rent costs. That can often mean you are better off under UC than TC and HB particularly if you claim childcare.
Like I said even so I would not recommended switching.

MyDcAreMarvel I've not seen a scenario where someone is better off under UC yet although I'm sure its mathematically possible.

I rent out a room, did this in lean times and put my dds in one room sharing to obtain a spare room ( better to have a roof over our heads than a bedroom each) you can earn £7000 tax free from renting a room. Not sure though how it’s counted as part of income for UC

Instead of you do going back to work full time, would it be better for him to work part time? With you both working less you may find you are actually better of through tax as your joint personal allowance is over £24000 per year and then add in your married allowance - so if you could both earn £12k your net pay would be far better

Sorry just to add - it was in your op that you expect your do to go back to work eventually and I was meaning for the future not right now for your do to be working

As for immediate actions

Use money advice service budgeting webpage as it’s really good for keeping track of income and outgoings

Contact district council and apply for council tax relief as you may not be receiving this and with your income drop might now be eligible.

Get your council tax spread over 12 months instead of 10 as this can make budgeting easier

Food shopping for 6 will be a large expenditure, meal plan and have simple meals that you can repeat weekly. Organisation on this will be paramount. Home cooked food is cheaper than takeaways. Ditch things like washing softener, clingfilm, make bread, ditch the crisps & make popcorn, two meat free meals per week, all these things will add to your savings

Join the library, use ebooks and emagazines - for yourselves and Children.

The car isn’t for every trip, 2 miles or less is walkable.

Get rid of contract phones if outside of contract, use sim only get reduced rates if possible

@ivykaty44
Thank you so much for all your advice. Very appreciated. :)

We already rent a room out. :)

The main difficulty is that he was on a good wage which I can't earn. (For at least 4/5 years working full time.) And so we've budgeted accordingly.
We're still in a good financial position compared to many, many people - so entitled to very little benefits. It's just the massive drop that is a bit of a shock.

But we have no debt apart from mortgage and really, as we've only had his wage for 10 years we've been fairly frugal in our living (so I could be a SAHM) but increased our spends as his wage has gone up. So we'll just have to go back to where we were. At least it's likely he'll be able to work in the future so both working could achieve what he was on even if part time.

But the things you've suggested are helpful. I've realised I need to start from a position of what can I spend, rather than how do I keep the same lifestyle but cheaper.