I don’t know the full details but if I’ve got the gist right it seems extraordinary to me. Daughter and Son In Law have 2 children, one 4 the other under 2. Up until now she has been working 14 hours a week her husband full time. Now they have been reassessed the upshot is if she carries on on those hours they will be significantly worse off every month. So much so they have worked out that if she cuts back to 7 hours work a week they will be much better off? So she has done the drastic move of changing jobs based on those calculations. Apparently it’s only for 18 months until the youngest gets a nursery place free.
As I say I’m no expert, haven’t discussed it with them but can’t believe people are being actively encouraged to work less hours by the system?

Sadly it’s one of those things where you do need the full details. There are so many variables to take into account, but simply put the ‘old’ systems of benefits can throw up some perverse outcomes with regards to work.

This is one of the policy aims of Universal Credit, which replaces tax credits and several other benefits (not child benefit that you mention though), to address such scenarios and always ‘make work pay’. Under this system your daughter and son in law would have a simple ‘work allowance’ (amount you can earn before impacting your benefits) and then a taper rate deducted off every pound earned above that.

TL;DR it’s complicated 🙂

My understanding is both parents need to work at least 15 hours per week to qualify for certain elements of credit, it is an infuriating system to deal with though.

For a couple on Working Tax Credit they need to work 24 hours minimum between them and one member of the couple needs to work a minimum of 16 hours.

Child Tax credit doesn’t require anyone to be working.

The whole system is shit. Child benefit or family allowance as we used to call it particularly so. Appreciate this is the otber end of the scale money wise but husband and wife can each earn £49999 a year and receive full child benefit for every child. 1 out of Husband or Wife can earn £60000 a year and you then receive nothing.

Also the “earn” 50k plus to have to pay some of it back and 60k to have to pay it all back includes the perceived value of any benefit, and in that case you need to complete a self assessment.

That is the only way you lose child benefit.

To give you an example, with really expensive cars being cheap to lease, you could get a £500 per month company car (so worth about 7k a year to you including insurance and tax) being valued at a nearly 20k benefit, being taxed as such and also losing your child benefit, despite your wife not working as was made redundant and you earning a smidge over 40k.