Deferment of studen loan and tax credits

[insideoutandback]

I am due to defer my student loan (old loan, from late 90's). My income is low. I am married and we have 4 children but have taken guardianship of a 5th child. This means my tax credit award pushes my income .40p over the monthly threshold. However the tax credits are joint between my husband and I, will this reduce the amount theycredit to me?

How come you chose to have 4 children when you already had an outstanding debt (student loan) and are on a low income?

Could you ring the help line without giving identifying details and ask them? Or ring citizens advice?

Tax credits don’t count as income for student loans.

Thanks, obviously I choose that because I am complete idiot ! Not that circumstances change or anything !! That has to be the stupidest comment I have ever seen ! Totally unhelpful. Ffs

They do count Tax Credits, I phoned today but the girl online was waiting for a manager to check and I had to go out. Will ring back tomorrow.

Marvel is correct. The income threshold is based on your taxable income, tax credits do not count towards that.

Who put 50p in the dickhead

It’s based on taxable income. You’ll be fine.

Again THEY DO COUNT, I phoned today. The most certainly count I just couldnt get confirmation if I deduct some as its a joint claim.

I think you need to check again, as the student loan website is very clear that your income for student loan purposes is only your taxable income. Tax credits are not taxable, so don't count. It's likely whoever you spoke to today was wrong.

They really don’t count , you were given incorrect information.

Employers deduct repayments from salaries. Employers have no idea what benefits you get. That's because they don't need to know, it's not part of your taxable income.

Any clearer?

Are you dealing with the actual Student Loan Company or is it one of the loans that have been sold on? If so, they might have different rules as to what counts as income towards the threshold.

You’d best speak to them in the morning.

Jemihap wins for helpful comment of the week 🙄

The old 'mortgage style' student loans from the 90s do take tax credits into account when calculating income for deferment. I'm not sure on the joint aspect though.

Will they not just take a percentage of the 40p?

With this type of student loan as soon as you earn over the threshold amount the whole loan is paid over 60 months for 1-4 loans or 84 months if you have 5 years worth of loans. So it can be quite a lot per month depending on what you owe.

If it's been sold on then the companies include it. It's not explicitly mentioned as excluded in original contracts that were signed so they have every right to include it - it's only the student loans company who exclude them (and a lot of other things as well).

Eventually all loans will be sold on (they're targeting those who have never paid) and people find they suddenly must repay as the applications require all income to be declared regardless of it being taxable or not, it's no longer only those of the early 90s that are being sold on.

I know someone who has a joint claim and had their application to defer rejected this year as its been sold on and now must repay (I think they're over by something like £5). They began uni in 2000. But that might be a different company to the OP.

I had this style of loan, and my starting salary out of uni was £100 pa more than the threashold. I had to start payments of £126/month immediately which was 10% of my entire take home income. There is no sliding scale, it's a cliff edge scenario.

If it's a joint claim can you put it all in your husbands name?

I have a loan from 1998 which was sold to Erudio, and they specifically ask about working/child tax credits on their deferment forms. They also ask about other non-taxable benefits, e.g. JSA/Income Support, Housing benefit, child benefit etc. The loans which only take taxable income into account and are repaid via employer deductions are the newer loans from 2000s onwards, which is irrelevant to the OP, as she says her loan was from the late 90s.

I am having to pay a large chunk of my income towards student loan repayments, despite being only £60 odd over the threshold. It's a much harsher repayment system than the current one.

I know of at least one old uni friend who has 'forgotten' to mention one of her benefits on the deferment forms, which seems a bit risky to me, but it does seem that these loan companies that the loans were sold to don't have the same access to income information that HMRC do, so she seems to get away with only submitting partial income information. I'd be too scared of doing that though, as they can cancel your right to defer/get the loan written off if they ever found out.

diono they can make contact to confirm income. It's part of the deferment agreement, they don't do it all the time as its not automatic but I wouldn't risk it personally, if found out the whole amount is then due!