Answered January 1, 1970 by Sarah Pennells
What benefits are you entitled to if you are a family of four with one income of £24,000? We have a baby under one year and teenager of 14 years old.
Sarah Pennells's Answer
Editor’s note: Answer provided by Victoria Todd of the Low Incomes Tax Reform Group
When you say ‘family of four’, I assume you mean two adults and two children – the two you have mentioned in your question. That’s the basis on which I’ve answered your question.
The first thing to mention is Child Benefit. This is a weekly, non-means tested benefit which (from April) is £20.30 for the first child and £13.40 for each subsequent child. You need to make a claim for Child Benefit. If you are already claiming for your older child, you need to ensure you tell the Child Benefit Office (part of HM Revenue and Customs) about the birth of your second child in order to claim the additional amount. Child Benefit can only be backdated up to 3 months, so don’t delay.
HM Revenue and Customs (HMRC) also administer tax credits. If you are already getting tax credits, you should notify the tax credit helpline (0845 300 3900) about the birth of your second child as you may be entitled to the ‘baby element’ of Child Tax Credit which is payable until your baby turns one. Like Child Benefit, changes of circumstances can only be backdated up to three months.
You don’t say whether your income is from work and how many hours are worked. There are two tax credits. Tax credits are initially based on previous tax year income and providing your current year income does not increase by £25,000 or more as compared to previous year’s income, your award will be finalised using previous year income. If your income falls from what it was in the last tax year, you can ask HMRC to base your award on an estimate of this year’s income (although you need to be careful not to overestimate any fall in income, otherwise you
may incur an overpayment).So, your 2010-2011 tax credit award could be based on either your 2009-2010 income or your 2010-2011 income. Without knowing your income for both years it is impossible to say whether you should be getting Working Tax Credit and Child Tax Credit or just Child Tax Credit. If we presume that £24,000 is your gross income for both years, you should get approximately £50 per week Child Tax Credit (your income would mean although you might qualify for Working Tax Credit you won’t receive any) made up of
- £2,235 for each child £545 ‘family element’ £545 baby addition (one year only)
Which is then reduced due to the level of your income.
If your 2009-2010 income was lower than £24,000, you may be entitled to more. A change in income is not something you must report to tax credits immediately, although it is generally better to tell HMRC if your income changes in order to avoid overpayments of provisional payments at the start of each tax year. If you are getting any other means tested benefits, you should get advice on how income changes will affect your tax credits.
Don’t forget that you can also get help with up to 80% of any registered or approved childcare costs through Working Tax Credit if one of you is working at least 16 hours.
You should also have a full benefits check carried out, for example by a local Citizens Advice Bureau or local authority welfare rights worker, to see if you are entitled to other benefits. For example, the Sure Start Maternity Grant is a one off £500 grant payable if you are in receipt of Child Tax Credit at a rate above the family element. However, there are very strict time limits for claiming this (normally within 3 months of birth). A benefits check will also look at other benefits such as Housing Benefit and Council Tax Benefit.
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