ctcredits overpayment and housing benefit increase??

[ALFIE1978]

Hi all

Hope someone can help me with this one...

 

It looks like we will of been overpaid CTC by about £2000 by April10, due to me dong overtime at work.We have 4 children as my understanding is that we wount get any money from CTC until the overpayment is paid back.Currently getting around £150 per week.

 

This means the new award notice will state £0.00 to be paid weekly.

 

At the moment we dont claim housing benefit ,but due to the changes on 2nd November seems that we may be due £30ish a week as child benefit is now disregarded.

 

My question is now when we apply for HB and we have an award notice of £0.00 per week will this mean the HB award will be higher than estimated.Online calculations indicated the Rent and Council tax will be covered in Full.

 

I spoke to CAB and indicated it was a case of take with one hand and give back with t'other.

 

Any thoughts experiences?

 

Thanks Alf

[Zamzara]

Firstly, are you sure you will be overpaid? Under the newer rules the first £25k of increase is usually disregarded. (The main exception is if they are already paying you a higher amount because you asked them to use your current year's income in the calculation, in which case it can revert back to using the previous year's income if that turns out to be lower, causing an overpayment.)

 

Secondly, if you are overpaid there will only be a fairly small deduction from ongoing tax credits, they don't take the whole lot.

 

But the general principle is right that for housing benefit your actual received income is what counts, whether overpaid tax credits, or less tax credits due to a deduction.

[ALFIE1978]

Firstly, are you sure you will be overpaid? Under the newer rules the first £25k of increase is usually disregarded. (The main exception is if they are already paying you a higher amount because you asked them to use your current year's income in the calculation, in which case it can revert back to using the previous year's income if that turns out to be lower, causing an overpayment.)

 

Secondly, if you are overpaid there will only be a fairly small deduction from ongoing tax credits, they don't take the whole lot.

 

But the general principle is right that for housing benefit your actual received income is what counts, whether overpaid tax credits, or less tax credits due to a deduction.

 

Thankyou for your advice.

 

-The CTC we get now is based on last years income of £20700 but by April 2010 I would of earned £24700.Looking at the HMRC website it states :

If the customer’s original claim is continuing and the customer is getting only the family element of Child Tax Credit we will take 100%, so the customer will receive nothing until the overpayment is repaid.

So to my way of thinking in April when they ask what I earned last year , yes an award will be given but an overpayment would of occured. So they wont pay us anything until the the amount of potiential payments cover the cost of the overpayment?

 

Alf

[Shoelover]

Just be careful to make sure every time your TC's change you take the letter to the Housing Benefit office.

[TCman]

The first 25k is only disregarded if you do not decrease your income after the initial award of the year is sent (TC602a). If you have decreased your income then any change after this can have an effect on the value of tax credits you receive.

If they have stopped your tax credits to recover the overpayment. As long as your award is higher than the family element you can ask for an in year restriction to be placed. This will normaly allow for a % of the overpayment to be recovered rather than the full value.

However if you have already received more this year than what your total award should have been it may be unlikely for you to recieve anything further.