Question about Tax Credits, overpayments and changes in circumstances (ie splitting up with your DH).......

[FAQ]

OK last tax year (2006-7) we were over paid quite substantially on our TC (our fault). This year they've cut out payments dramatically (from about £300 a month down to £27) - some of that is "repayment" the rest of the cut is down to the fact that our joint income was pretty big last tax year.

Now AFAIK if we stayed together the Tax Credits next year would still be pretty low (possibly only because of high salaries but not certain).

Anyhow, IF it turns out that next Tax year our payments are still being reduced due to previos over payments how would that affect me claiming TC on my own with a greatly reduced income???

ie - when H moves out (before the end of the tax year) and I tell them the changes will the payments for this tax year (and next) then be based on my income for the year (a "massive" £4500) or our joint income (nearer £30k?). And what about next tax year when it will ONLY be my income that is used???

oh and if you've actually understood any of that post you get my "waffle interpretor of the year award"

Er emm I think what you are asking is will they go on your predicted income or just carry on regardless with joint income,

answer no they will go ion your single income, you will have a joint claim at present, you will reapply as a single claiment.

If your personal income is going to remain the same they will go on your previous income, if it is totally differnt they will propbably use your new predicted income but they might want evidence.

personal income will probably be around the same (I think..........I'm thinking minimum wage 16hrs a week.....that would be around the same amount wouldn't it?).

Thanks - oh and well done >

If it is 16 hours I think you will go on Income support, any way you can make it 17?
I think that is the cut off, I had the whole debate whether to go for under or over, I decided on tax credits so we could come to a private agreement on maintenence payments. I still get free dental, prescription clothing grant etc.

ok - 17hrs a week at minimum wage then - still around a similar amount to my current personal income I think

(I'm still looking for a new job - but all jobs that I'm looking at are around minimum wage and 16-20hr a week type ones).

Usually if you are repaying an overpayment and make a new claim, the overpayment cannot be taken from the new claim.

Therefore the amount owed to them becomes due and they will usually ask for it in one go. They may then consider a payment plan or a few instalments.

would they want it all from me - or from both of us???

overpayment on a joint claim, they would want it from both of you. Im in the opposite situation where my single claim was overpaid, they said they couldnt touch the joint claim to get the money back. I was supposed to pa it back over 12 months but afetr 18 months of them not setting up the direct debit properly i have sent them a cheque instead.

thanks KK - I don't think there's much left to repay actually so when the time comes for me to make my single claim neither of us should have too much trouble paying back what we owe (she says hopefully)