Working Families Tax Credit - anyone know anything about it?

[Rosy]

We have an 18 month old child and would like to have another some time next year. At the moment I pay half my salary on full-time nursery fees, so it obviously wouldn't be worth going back to work and putting 2 children in nursery. (I earn quite good money, but nursery fees round these parts are astronomical.) I think nursery is so important, especially for my child that's currently there, that I would work for nothing, but not full-time, and not in such a high pressure job. Anyway, my big idea is to work two or three days a week in Safeway or somewhere (on around the minimum wage) and send the children to nursery and claim WFTC. I calculate from the Daycare Trust website calculator I should be about £200/month in credit. Does anyone have any experience of WFTC or know anybody who does? I'd be grateful for any advice anyone could give me, as we've just bought a bigger house on the strength of these calculations!

Work out what your weekly earnings are if they are less than £199.95 then you may be eligable for WFTC. Are you employed or self employed?, on WFTC you get help with Nursery fees and NHS Charges, Dentist, school meals, and the Optician.
work out your monthly expenditure of everything like Nursery, Mortgage, Insurances both Building and Personal, also your Pensions include how much you pay in them as well, electricity etc, and if at the end of all your calculations you are living on less than £199.95 per week combining both wages then fill the form in and try, I think that if you know an accountant then you should seek their advice as well or the Citizens Advice.

Good luck.

hi, i give money advice for a living - it's quite easy to get advice i think, so you shoud do that with all your figures to hand. i haven't been to the site and so don't know what they're calculator is like - but i hope its trustworthy. it's quite an easy calculation if your wages are easy to assess. i can tell you how to work it out but it's easier to get advice and get actual figures.

1. work out your maximum benefit: £59 for adults (only count this once!) and £26 for the baby. Add 70% of you childcare costs (per week but only up to £100). Add £11.45 if you work more than 30 hrs. The total is the maximum benefit you can get.

2. work out your net income. if you're on a straight wage its easy. if you are self employed etc.it gets more complex and you need advice. To your net wage you add back on half of occ. pension contributions. don't include your child benefit.

3. deduct £92.90 from your net income.
   4)find 70% of that answer, and
   5)take that figure (step 4)away from your maximum benefit calculated in step 1!

it is easier than it sounds! i can do it on the back of envelope in less than a minute!! unfortunately ready reckoners are no good when you are paying childcare costs and it has nothing to do with your expenditure (apart from the childcare bit). a decent CAB should be able to do this for you.The WFTC helpline itself used to work it out too but i'm not sure they do now.

you only get help with prescriptions etc if the amount deducted from maximum benefit is less than £70.(ie figure found by step 4)

i'm v.tired tonight but i hope this makes sense.

doh!!!!! just realised that the percentage you use in step 4 is 55% and not 70% (that's for housing benefit). don't know how i managed to mess that up - i've been doing these calcs since it started but obviously should be sacked! time for bed definately!!

Its also worth remembering that once awarded, WFTC remains the same for 26 weeks, regardless of any change (better or worse) to your finances (the exception is the birth of a new child). You can claim whilst on maternity leave and your income is therefore lower, but then cannot claim for childcare for the new child OR wait until you return to work - your salary will then be used for the calculation, but you can claim for the childcare.

I am currently on maternity leave with my 2nd child. I can claim now and use my eldest childs nursery fees in the calculation, or wait until I return to work and include 2 lots of nursery fees - in my case I will receive £2.50 per week more if I claim now (I promise not to spend it all at once!)

Also, if you do qualify for WFTC and are pregnant or have a new baby you can apply for a one off payment of £300 from the Benefits Agency - but only before the baby is 12 weeks old.

Gumsy, I take it this calc. includes hubby's wage, or else we could all claim it! If so it seems like another disincentive to marry.

Surely this is an area where married and cohabiting couples are treated the same? Most things that disincentivise (is this a word?)marriage are.

yes and yes! it does include h's wage or cohabitee (opposite sex)- but not maintenance - which is why it was so much better for single parents. (i'm not saying finances are a breeze on your own - just that it is better than the old system).

other income can also be taken into account and there are rules for savings over £3,000. basically if you're anything but straight forward you need advice otherwise you could be disappointed.

Thanks for all your messages - especially Snugs. I was starting to think that WFTC was just a figment of the government's imagination. Whenever I mention it to anyone they are all very sceptical that we could claim it. I think most people don't realise what a pittance so-called professional civil service managers get paid. However, we feel quite well off as we had loads of cash when we bought our flat & therefore have a very small mortgage (about £200/month). So my supplementary question is: am I right in thinking that your outgoings (except childcare fees) are not taken into account at all? And that there's only a very small incentive to get a well-paid job or find cheaper childcare or work in the evenings and therefore not need paid childcare? Thanks in advance.

Yes, only outgoing expense allowed is childcare - and then only if it is 'registered' i.e. Nurseries/Child minders.

For a rough estimate of if you will qualify you need to be earning less than £23K (joint income) with one child and less then £30K with 2 or more children and claiming for childcare.

Talking of WFTC the only thing that gripes me is that ,not saying its easy on your own,but,because maintenance isn't taken into consideration I know of people who are raking in loads of maintenance and getting their mortgage paid by the ex and earning the same as me ( as my hubby isn't earning) and also getting full WFTC !
Apart from that ,WFTC has been a help to me and means that you can afford to work for a small amount while kids are small and reap the benefits as they get older 'cos you won't always be paying full childcare!

Has anyone who is claiming Working Families Tax Credit received the letter notifying of the proposed changes next year? Or does anyone have any information on the changes?

The letter says that from April 2003 credits will be based on pre-tax pay from tax year 2001/2002. For most of that year both dh and I were both working full time, with only 1 child whereas now we have only dh's income and 2 kids! I am already panicking at the difference that losing this benefit will make to our family income, but I am (as always) totally unable to get through on the telephone to the helpline for more info.

Would be very grateful if anyone can shed light on how the changes will work.

Snugs, Gumsy or whoever else may be able to help me.

Would I qualify? My husband and me are separating (his choice, not mine). We have been married 10 years and have 3 children (9, 5, 8 months). I only work three days a week and earn a basic wage of £14,100 per annum. Would I qualify for WFTC?

Thanks.

Bumblelion, I've been wondering how you are. The website is here

Bumblelion - the quick answer I think is yes, barring savings over £8,000 you qualify. There is a calculator on the website.

www - thanks for the link. Can't find much regarding exactly how the change will effect us - lots of jargon - but will study in more detail later.

Thanks for the link - I must qualify - I definitely don't have savings of £8,000!

Will check the link later after lunch, thanks.

Bumblelion, I am in the same position as you as far as the WFTC people would see it. 3 children, one wage (was £13.5K when calculated) and we currently receive around £80 per week and free prescriptions etc. I am a SAHM and look at the WFTC as my 'wage' because I couldn't afford to pay for childcare for all 3 and come out of it with any wage left if I did work. You should qualify for childcare costs too so you would probably get even more from them. Only the first £15 of anything DH gives you will be taken into account when they work out your income but half of any pension contributions which you pay will not count as income (if not taken off at source).

Snugs, I've just had that letter too, it came just after my renewal pack. As I understand it, nothing is certain yet because the whole thing has to be okayed by the government before the changes are implemented. I always read up on these matters at budget time but no specific information was given though it did lead us to believe that we would be better off (but they always say that don't they). I hope it makes the whole thing simpler because the form is a pain to fill in and I also find the £70 free prescription rule a bit unfair, we will lose out this time by about £1 by my calculations and this can result in an overall loss of £200 or more over the claim period with all the benefits that we would lose. I might be wrong but I am under the impression that the system will work in a similar way to the children's tax credit and add a certain amount to your tax code, presumably if you don't earn enough to make this up you will be paid the additional credit on top.

Bumblelion, you can pick up a claim pack from post offices and social security offices and most of the information is available on the Inland Revenue web site.