In 2011 the biggest losers are those:
- Whose Child Tax Credit has stopped altogether – ie those families with a gross taxable income of more than £42,000 a year who were just getting an award of £545 or less per annum - estimated at half a million families. But Click here for examples of families with an income of over £42,000 who can still claim.
- Families whose Working Tax Credit award includes an element for child care- because help with eligible child care costs has reduced. This will save the Government £385 milliom a year by 2014/15. 60% of recipients of this help are lone parents.
- Families with a baby under one due to the removal of the 'baby element'.
- People who started work in 2011/12 or havd large increases in their income, who may find that at the end of that financial year they were overpaid. If their gross annual taxable income for the whole of 2011/12 increased by more than £10,000 above what their gross annual taxable income was in 2010/11- (ie the income figure used by HMR&C to assess their 2011/12 Tax Credit award), then they may have found that they were overpaid Tax Credit when their 2011/12 award was reconciled in 2012.
For more information on these changes please click here.
In 2012 the biggest losers are:
- Couples with children getting Working Tax Credit where either just one member of the couple is working between 16 and 24 hours a week, or where they both work but their hours add up to between 16 and 24 hours a week, as they will no longer qualify. (Some exemptions.)
- Families just getting an award of £545 a year Child Tax Credit during 2011/12, as nealry all of them have lost this from April 2012.
For more information on these changes please click here.
Any winners ?
Just one group:
- People aged 60 or over who are working 16 hours or more a week, who since April 2011 have been able to claim Working Tax Credit if their gross annual income for 2010/11 was less than approximately £10,000 for single claimants, or approximately £15,500 for couples. (There figures have stayed the same for claims made during 2012/13).
Tax Credit changes and Housing Benefit
Tenants already getting Housing Benefit need to notify the HB Office of their new Tax Credit award as soon as they are notified by HMR&C.
Tenants not already getting Housing Benefit should be encouraged to claim as their lower income may mean that they qualify for some Housing Benefit. And if they have seen a drop in their Tax Credit income, they should be advised to get budgeting advice if they feel they may struggle financially.
We have produced a general flyer that summarises the key Welfare Reform changes that tenants may be worried about - you could adapt parts of it for an article in your tenant’s newsletter. For other useful tools click here.