Child tax credit

Can anyone tell me the rules around child tax credits in our situation...

Husband and I are divorcing and we plan to split all assets 50/50, for our son to live one week with each of us so 50/50, and our incomes are up in the air a bit. Husband earns about 1,000 a month and I am just applying for a number of jobs so don't know yet how much I will bring home.

I believe that only one parent can claim child tax credit (and child benefit for that matter), is that right? Who decides which parent claims if custody is 50/50?

I think I will probably have the lower income so could really do with the money, but would I have to give some to my ex too?

Couple of answers and some questions I am afraid.

Firstly how many children do you have? presumably only one from your post.

In terms of the legalities the Child benefit people look at where they spend most of their time if this is undecided then they look at the address for which the child is registered for places such as school, Docs, etc.

Child benefit becomes important in a fifty fifty split as even then according to csa guidelines the person claiming the child benefit can still claim child maintenance (albeit at a reduced rate) for the other parent which can (at least in my eyes) be unfair especially if you are sharing all costs, etc.

Which account is the child benefit currently being paid into?

Hi, yes just one child, aged 12.

The child benefit is currently paid into my account. We also get child tax credit and working tax credit which is paid into a joint account.

Even though my husband earns more than I am likely to he will barely have enough to pay his own bills, so I can't see him affording any child maintenance.

Hi Joss,

Below is the web address for the child tax credits. It tells you all you need to know. Has a calculator etc.

www.hmrc.gov.uk/taxcredits/indexhtm

0845 300 3900 Think phone line is open 8am to 8pm

From my rec you get 545 regardless how many kids you have then I think 2300 per child on top.

Both these amounts have no link at all to Child maint, spousal Maint, child benefit and council tax 25% sinle person benefits incase you didn't already know.

I looked into all this for my wife. Shock horror she had already been discussing with her dickhead lawyer lol.

Really pissed me off as she has been whinging that she won't be able to rent in the area we want our kids to go to school. I know what I will be payiong when we sort of crap out and thats more than enough. Thats without taking into account she will et at least another 250/month on top of this!

Ok end of rant.

Good luck and let us know how you get on.

Take care

L4N

Hi

Yes either of these benefits can only be paid for to one person. As you with both have 'responsibility for a child' either of you could CLAIM either benefit.

Who decides which parent claims if custody is 50/50?

The parents decide - if they cant agree then the relevant benefit paying authority decide. Its possible for parent A to claim CB then parent B to claim CTC. Tax credits helpline are useless and probably wont tell you this! The legislation provides specifically for this.

If you cant agree and you both claim they go thorugh a conflict claim procedure for each benefit. Here is some more info

www.hmrc.gov.uk/manuals/ntcmanual/applic...pl_wl/ntc0050230.htm



Benefits and maintenance rules do not properly support a child having two parents post separation. Ridiculuous but true. Ther are two approaches the moral and the legal and they are different.

Moral approach: The higher earner claims child benefit and the lowere earner claims CTC so between you you maximise income. Then you agree to pay no maintenance to each other. You then find away of ensuring all the money paid in benefits get split between the childs households. If you were the claimant of CTC the morally you should give some money to support your childs other household. At the end of the day the money is supposed to be for the childs expenses



Legal approach:

You ensure all registrations at doctor/school etc are at your address and you claim CB, CTC then apply via CSA for maintenance. There is no legal requirement to share the benefits between the household that your child lives in. Benefit decisions in this area are notriously hard to predict in tight 50/50 cases, and if i were the other parent i would immediately conflict claim and then put in for maintenance the other way. This not only will not benefit your child (it wil in one household but no the other) but it will cause conflict and animosity between you and the other parent and the focus of how you will relate to the child will revolve around the benefit/tax credits/maintenance impact.

Ideally you can get together and trying to look at both your childs household and do the best by your child.

Thank you so much for the comprehensive replies. I imagine that we will manage eventually to agree an appropriate split. In other words one of us claim the CTC and CB and pay the appropriate amount to the other. That is my hope anyway...

I can see it getting so difficult. My husband is really frightened about his financial security and believes that I have a higher earning potential. Which may or may not be true. One of the difficulties in the marriage for me is his negative outlook on life.

So I can see it being an ongoing argument about who earns what and how it should be split. Neither of us want to go the legal route as it will only cost us precious pennies, but where do you draw the line with negotiating a fair split as the years go on? Neither of us would want to see our son struggling financially in one house or the other. But does that mean for the next 6 years we have to disclose precise earnings to each other to ensure the credits are split fairly based on income?

As the famous song goes... "There may be trouble ahead".

Hi Josslyn

If you decide to go down the non adverserial route then realistically you wil have to have a degree of information sharing. But it shouldnt be too bad because each person can punch their details into the benefits calculator (another poster put the link on i think) so that it will say what each of you would get- you can then compare and contrast and thus the higher TC entitlement would pay some to the lower.

Even better if the money is all put into something that clearly is a shared cost- for example my child lives in two household- broadly 50/50 time split. We both work so all teh beenfits go into the nursery bill then we split the differnce that left over. I earn slightly more than my ex so she claims all the benefits as it more advantageous. That money goes into the nursery pot- then we split the diff (I pay slightly more due to slighty higher earnings). At some point her earnigs may go past mine thus we would switch the arrangement round as it would maximise the entitlement to benefits. Its useful id one claim CB and the other claims Tax credits- simply because they act as proof for other reasons that there is a dependent child (access to council housing, Local housing allowance and a host of other things). Doing it that way means you both have proof if needed.


Yes its not easy- in our situation it hasnt been without its conflict and has taken time to settle- its been three years now. The problem is that the benefits and welfare system can only comprehend a 'parent with care' and an 'absent parent' and its all built on that model. This means that in order to support a child sharing their residence then bioth parents need to be committed to it. I dont want to get moralistic about it but if you have a child with someone then your are linked financially to them at least until that child is fully self sufficient (probably when they are about 40 ha ha). For the arrangements to work you need to recognise/realise ( i am sure you do already) that the child hasnt got two separate lives will still have one life post split albeit in two different buildings. In may case my ex now wants to move (stil in the locality) but had difficulties getting a mortgage. I have therefore had to put the new purchase and mrotgage etc in my name but she pays for everything and when sold she will get all the equity etc. At the end of the day if she is in a financially stable position then my child is in a stable home in addition to the stable home i provide for him. You will also need to discuss about liabilities and arrangemnts ie if child wants to do an after school activity, join a sports club, whatever it is.

If you go down the adverserial route and each put competing cliams in and go to CSA etc then
a) the level of confilct will not help the childs stability
b) as a whole you will end up losing out financially (though there will be a winer and loser between the two of you)
c) the conflict will likely spill over into the school, doctors, dentist as each person will probably seek to change the addresses to support their conflict claim.

We came very close to this nightmare scenario but i think we have got there in the end. There is a wealth of information and a some decent practical books on running a 50/50 type situation- they are good- use them!

Even if its choppy at the outset i would encourage parents to perservere as it will settle. Ultimately the child will increasingly shape how the relationships are.

If you were hoping for a Clean Break and totally separate lives then think again


Good luck- and if i can help any please just post on here an i will reply. I was in the same situation as you 3 years ago.



Rich