Tax Credit and Working Families Tax Credit

Hi guys,
I am hopefully reaching an agreed settlement with my ex from the sale of the property and pension sharing. It has taken months but finally the light at the end of the tunnel is in sight

She is in receipt of a substantial payment every four weeks from tax credits and working families tax credits as she still refuses to seek full time employment and continues to work 17 hours per week on a very low income. With the 3 children, she is being paid £1,300 every four weeks in this benefit.

Once the property is sold, she will then be paid an amount of £60,000. Does anybody know if she is entitled to keep the benefits in payment having so much money in her account? I don''t know too much about tax credits but I am being told that it is just based on income and hours worked and they do not take into consideration what savings you have. Doesn''t seem very fair as you could be a lottery winner and still receive benefits!

I know when my grandmother was put into a home, she had to self fund her care until her savings had reduced to around £13k. Different scenario I know but I would have thought all benefits would be treated with the same approach. What I think is going to happen is that the money will disappear on the basis that she is stating she owes money to her mother and brother and I think a claim will go in for housing benefit. Meanwhile, I am left with £10k from the house if I am lucky as having to clear substantial debt.

My understanding is that she would have to declare any income over £300 from interest made on the lump sum.

Presumably, the lump sum will be used to rehouse herself and the children?

What is the issue here? Are you concerned that your wife could lose the benefits?

It is a bad mindset to get into - comparing what your stbx has to you.

Whatever you view as unfair, I''m sure she could also do the same with you.

As a lone parent with 3 children it''s difficult to secure a FT job if she doesn''t have the right support around her - the children are still going to school there are 13 weeks of holiday they have every year - not many FT employers offer 13 weeks holiday. Unless she has family or friends around her that can look after the children, how will that work?

By supporting your children and giving them stability you will also be helping your stbx, although you may not like this it is for the benefit of your children. You don''t really want your own children to suffer financially just because you feel your stbx shouldn''t get certain benefits, surely?

Try focussing on working together as parents to ensure the children are as supported and as stable and reassured as possible. Your current thought process can be very detrimental.

WR

Hi,
My wife will not be able to achieve a mortgage due to her income. From the £60k, she owes money in the region of £20k and so will be left with an amount in her bank as savings. She has renewed her tenancy agreement for a further 12 months and her payment from tax credit and working families is covering the rent and utility bills. From her income, child benefit and maintenance, that is more of her disposable income for food, running her car and day to day living expenses.

My concern is that if my wife then has to declare this amount of savings and her tax credit and working families tax credit is either reduced or stopped, she could then make a further claim to me for increased child maintenance. We are currently agreeing a monthly amount which according to CMS calculation is roughly on target but she is already making noises about the joint custody arrangement as ''the kids don''t know where they are from one day to the next''approach. If custody was reduced, she obviously gets more. There is also mention about spousal maintenance. The house will be sold before divorce is finalised. She will be in receipt of her settlement from the house first and then a Clean Break will follow. If HMRC turnaround and stop her benefits, a spousal maintenance claim could come onto the table.

Hi WR,
I completely agree with everything you say.
My wife has always worked part time at a school so she is with the children during all of the school holidays.
My children are now 14 and 12 and whilst my eldest is old enough and very responsible to be at home until an adult is there, it would cause a problem during school holidays.

I work from home - my job allows me to be remote from an office and I have stated that I will take custody of the children to allow her to look for full time employment. Because of the level of benefits she is in receipt of, she will not consider this as she would not be able to find a job at the same earnings level.
I have a wide family network that would support me with any child care issues. My ex only has her mother nearby and her health is failing.

Will you be getting a clean break from your divorce - if not she could always come back - what when the children are older and she loses all benefits and CM - if she has been out of work that long she may struggle to find employment to earn a decent wage to pay rent and bills? If you have a clean break arrangement she won''t be able to come back for money from you once the children are out of full time education. Maybe she''s concerned about the future?
She would be better trying to get some sort of part time work now if she''s able so once the children leave home she could increase her hours otherwise she''ll struggle to live and pay bills, I don''t think the benefits system these days pays all rent and C/Tax ?

I have asked for a clean break order to be issued on divorce so what is agreed at that time is final.

She works part time now - around 20 hours a week cleaning in a school. There is no full time positions available although she could look elsewhere for that.

I have been banging the drum for months now to encourage her to get a full time job as at some point all the benefits will stop. She earns £500 per month at the moment from her job and potentially in less than 6 years time, the tax credit payment will stop.