HELP Tax Credits Again!!!

A question about : HELP Tax Credits Again!!!

I've just received a new notification from IR which I really need help with. I have 3 children, one in childcare, and am a single parent. April to July worked full time, income 23000, childcare 45 per week 30 hours credit. Received a notification that I believed to be correct. July to Nov O4, reduced to part time still had same childcare costs, lost 30 hours credit - still okay with the new notification. November advised giving up job as am now full time student. Student income not taken into account, no childcare costs as not working over 16 hours told I should get the basic tax credit of 37 pw per child. NOT!! Notification shows will get 200 every 4 weeks. What's happened? Can they reduce my income this much when its already so low? My final income figure shows 12000 which is correct for the year April to November. Can anyone help me with this? ???

Best answers:

• Hi
  I'm afraid that could well be right. You're initial award was worked out on the basis that your working status would be the same for the whole year. So when you have a change in employment status, IR effectively go back and recalculate your award for the prior period as well as the future period. So you may well have been overpaid for the period to now and they are now going to claw it back. The only consolation is that you're award will increase again in April.
  I'm only guessing what has happened here, but I've got a spreadsheet that will work it all out. I forgot to bring it with me this morning, but I promise I'll come back as soon as I can, and confirm whether what I've said above applies to you.
  TTFN
  irs
• Thanks for that. As I see it I will have to live on an income less than Income Support levels and on top of that the school have said I am not entitled to free school meals either. what happens if I take part time work? Will this affect the tax credit award again? What really annoys me is that if I had kept my job I would have the work income plus 500 per month tax credit but as I have given up work I dont have the 800 per month from that or the 500 from tax credit - just 200 and a bit. What would happen if I had gone onto IS - would there then be any protection from being below the IS level of income? I heard IR could not reduce your income by more than 10% if you had to claim IS but it appears its ok to reduce my income by 50% because I'm a student even though my income is no more than IS. How true is this? Thanks for your help anyway! ???
• I would apply for Income Support if your income is less than IS. If you do get it you would then be entitled to free school meals. You can claim IS while a student if you are a single parent family.
• A friend of mine who is VERY badly off reckons that she cannot claim for free school meals, because her family's income level after WFTC has been added is just above the free school meals threshold. Indeed, she is convinced that NO family which is eligible for WFTC will in fact qualify for free school meals because their income with the WFTC will always be just too much.
  Is she right? She has three school kids so the free school meals would make a huge difference to her family's well-being.
• This:
  "In summary, free school meals are provided if a parent receives either:
  * income support,
  * jobseeker's allowance (income based),
  * child tax credit but are not entitled to working tax credit and your annual income as assessed by the Inland Revenue does not exceed Ј13,230.
  If you are an asylum seeker, you are automatically entitled to free school meals for your children. "
  from Salford.gov.uk website.
  However, she should check Council Tax Benefit & Housing Benefit (if relevant) entitlement.
  She might also want to get her Working Tax Credit entitlement checked - they have been know to get it wrong.
• She's already looking into HB - she did own, but has sold to pay off debts and is now renting, so it's only been relevant for a few weeks.
  I don't think she wants to encourage the thought that her WFTC is wrong - she's paranoid they are going to claw some back like they have with other people, although I don't honestly think they have over-paid her.
  I am also not sure if, as a family, they are actually any better off than they would be if her husband didn't work - given that they don't get free meals etc. at the moment. She should work but can't get any school work which is the only work which she can do because of children in school hols etc. etc. She has previously worked in schools but was on a short-term contract which ended ages ago now.
  Thanks for the response, Fran.