Including future tax credits and housing benefit?

My stbx and I are making good progress negotiating a financial settlement (I think!). However, I recently discovered that she is likely to get several hundred pounds worth of tax credit and housing benefit once she moves out. I want to factor this in to the negotiation, otherwise current position would leave her with considerably more disposable income than me which doesn''t seem right when I earn more than twice what she does; she says it''s an "extra" which shouldn''t be factored in and that the greater disposable over the next couple of years will allow her to build up some savings in the way that I will once kids leave uni.

Any thoughts?

Thanks, M

Yes she will receive this money if she is a moderate/low earner and the kids live mostly with her. However she cannot expect this to be ignored in negotiations. It forms part of her income until the kids are at least 18 and so needs to count for something.
When it comes to income, if she is the main carer then it is reasonable for her income to be similar, or slightly more, than yours as she will pick up the majority of the costs relating to the children. But this extra source of income should be factored into any negotiations - in some cases, tax credits can be as much as £12k+ per year so not something to be dismissed lightly.

Thanks for this. I have already agreed to pay ALL kids costs, even when they are living with her. They are 19 and 16 and, I think, will officially reside with her although, of course, will decide themselves where they want to spend their time.

M

My partners ex tried this one. Apparently all child benefits were there to be saved for the children future and so couldnt be classed as income.

Sorry but no.

What is your income after you take away cm and what hers if you include cm and tax credits. Work out how much difference and agree to share that in some way. Thats what a court would do.

It''s worth remembering that Tax Credits and other child-related benefits cease once a child leaves full-time secondary education, or once they are over the age of 19 and in full time education.

If her salary remains at the current level, and she is still providing a home for older children at University or in low-paid work, then the lose of such benefits will impact massively on the household income. While at the outset, it might seem that she has more disposable income than you, she won''t receive these benefits indefinitely.

We''ve done the same thing with CB - 19 yr old''s has finished so that''s fine; 16 yr old''s hasn''t and stbx is suggesting we cash in the account so that the CB becomes income for her (which I don''t feel too strongly about!).

My net income minus cm (£500) is £2700; her net income plus that cm plus tax credit/housing allowance/CB is £2,500. Does that really mean my sm to her should only be £100?! I''m offering over £1000 at the moment. Our situation is unusual in that I have tied accommodation provided by my employer so have no accommodation costs. stbx will have to rent (est. £1500pm).

I understand about tax credit and cb stopping when our younger is 19, but that is 2.5 years away.

mnf wrote:

My stbx and I are making good progress negotiating a financial settlement (I think!). However, I recently discovered that she is likely to get several hundred pounds worth of tax credit and housing benefit once she moves out. I want to factor this in to the negotiation, otherwise current position would leave her with considerably more disposable income than me which doesn''t seem right when I earn more than twice what she does; she says it''s an "extra" which shouldn''t be factored in and that the greater disposable over the next couple of years will allow her to build up some savings in the way that I will once kids leave uni.

Any thoughts?

Thanks, M

Yep I think you and your ex were only making good progress on negotiating finances because you hadn''t cottoned on to the fact that she''d have all that free money.Good luck trying to factor that in pmsl.

All the best
HRH xx