What happens if you stop working…

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  • #19759

    I still can’t get my head around what happens to Tax credits if you stop working.

    All the literature on the subject suggest this is [b:3e313b9bad]not[/b:3e313b9bad] a change of circumstances which needs to be notified to the Inland Revenue (although a recent issue of Housing Benefit direct suggested it was – perhaps they are reading different literature!). However, if someone stops working in (for example) November, surely when they re-apply for Tax Credit in April, assuming they haven’t returned to work, they are going to be told they are no longer entitled to Working Tax Credit (just the child tax credit, if applicable). If this is the case, are they going to have an overpayment going back to November, and if so, what are they going to recover it from? It seems a bit harsh to suggest they are going to be overpaid, when in reality, by leaving work, they would be worse off financially, especially considering there doesn’t seem to be any explicit reference of the need to notify the Inland Revenue (unless you read HB direct!). Are the Inland Revenue just going to say that person is no longer entitled, but ‘ignore’ the fact the qualifying condition for getting working tax credit actually ceased a few months ago?

    From a benefits point of view, some claimants have a tendency to stop and start work fairly frequently, so we have already had claimants who have just been awarded WTC asking us whether this will stop if they stop working…


    I guess if the Working Tax Credit is paid through the claimants wage slips, then it would stop when they stop work…

    Still not sure about those people who will receive it direct though (like the self employed)…


    We have a case where a claimant has left work and claimed I.S.

    The benefit office are saying she cannot be paid IS until the Inland Rev have “confirmed that WTC has ceased”.

    Given the delays getting even the most basic info from them, I wonder how long she can hold out?

    Any more thoughts on this. I’m typing this whilst waiting for the hotline to answer. My bet is that when I get through and pose the question they are gonna say “I don’t know”……

    Pause….. (only 3 minutes on LA hotline number)

    Well, I was wrong. The person I spoke to had an answer!

    They said that:
    * the WTC entitlement would cease unless the customer was moving into another job
    * the customer should let them know and they would do a change of circs on the claim, ending WTC
    * they also said that the Income Support section should query the TC system by computer link and establish the payment status for themselves

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