What happens to your benefits when your child leaves school.

  • thehaveringdaily.co.uk

Havering Welfare Benefits Adviser Lorraine Moss today writes in the Havering Daily:

After last week when we looked at Child benefit, I thought it would be a good idea to discuss how your benefits are affected once your children leave school.  I know from personal experience that this can have a devasting effect on your finances.  I feel that it is particularly hard for single parents because any child maintenance payments they may have been receiving will also stop as well. 

Further Education (Source When your child turns 16 or leaves education – Gingerbread ) 

“If your child is leaving school, staying in non-advanced education or training, is under 20 years old and enrolled on their course before their 19th birthday they are still classed as your dependent child. Therefore your benefits shouldn’t be affected – but there are still things that you’ll need to do.

What is non-advanced education or training?

This means studying for a qualification up to NVQ or SVQ level 3, GCSEs, A-levels or similar, BTEC National Diplomas, National Certificates or a 1st Diploma. It also includes Traineeships in England or Wales   and Foundation Apprenticeships  in Wales.

Her Majesty’s Revenue and Customs (HMRC)  have more information.

Do I need to do anything about my child benefit and tax credits?

Yes, you do. Child benefit and child tax credit can continue until your child’s 20th birthday if they remain in full-time non-advanced education or approved training, as long as you inform the child benefit and tax credit offices know.

The child benefit office should write to you in your child’s last year of school to ask what they plan to do afterwards. You can let them know that your child is staying on in education by completing this online form  – you’ll need your Government Gateway sign-in information to hand or you will need to set up a Government Gateway account if you don’t already have one. Alternatively you can contact them by phone.

You’ll also need to inform the tax credit office. If you don’t let them know your child is staying on in education, your tax credits for them will most likely stop after they have left school. Your working tax credit isn’t affected as long as you’re still getting child tax credit.

How will this affect my housing benefit and council tax reduction?

If you receive housing benefit and council tax reduction these aren’t affected as long as you’re still getting child benefit for your child.

My child has a part-time job – does this affect my benefits?

No, they are still classed as a dependant so any income they have won’t affect your benefits.

Should I still be receiving child maintenance?

Yes, nothing changes as far as child maintenance is concerned. Your child’s other parent has a legal obligation to be paying child maintenance whilst your child is in non-advanced education, as long as they are not aged 20 or over. If you’re not receiving child maintenance, remember that you can still claim it.

You can still claim, even if you haven’t received anything in the past. You won’t be able to get any child maintenance for a past period but can start to receive it from now on.  For more information see our advice on arranging child maintenance.”

Universal Credit – If your child is in further education, then you will continue you to receive the child element of Universal Credit and if you are working, the work allowance will continue. 

Your Child Is Going To University ( Source When your child turns 16 or leaves education – Gingerbread )

“When your child is studying in higher education they are no longer classed as your dependant, so you won’t be entitled to get child benefit, or tax credits for them.

Usually, child benefit and child tax credit continue until the end of August if your child is starting a higher education course in the September term.

How will this affect my child benefit and tax credits?

When your child goes to university they aren’t considered to be dependent on you, so you won’t be entitled to child benefit or child tax credit for them. You will need to inform both the Child Benefit Office and the Tax Credit Office  that they’re going to university. Both benefits should stop at the end of August if your child is going to university in the September term. You could be overpaid child benefit and tax credits if you don’t report your child’s change in circumstances, and HMRC will reclaim the overpayment back from you.

If you receive working tax credits they may be affected, depending on whether you have any other dependent children. As a single parent with a dependent child you need to work 16 hours or more to be eligible for working tax credits. If you don’t have any other dependent children you must work 30 hours a week or more and have a lower income to be entitled to working tax credit, so if it is your only or youngest child going to university you may no longer be eligible. Different rules apply if you have a long term health condition or disability.

You can check what benefits you’ll be entitled to once your child goes to university on the Turn2us benefits calculator.

Universal credit is a new benefit system that will replace many of the current benefits and tax credits. Since December 2014 some families with children who are claiming benefits for the first time in selected jobcentres may claim universal credit. For more information on universal credit and how it may affect your family you can visit the Gingerbread website, or call our helpline.

How will this affect my housing benefit and council tax reduction?

If you’re receiving housing benefit and/or a council tax reduction you must let your local council know if your child is going to university. Your child is no longer considered to be your dependant so the amount of housing benefit and/or council tax reduction you receive may go down, depending on your income and circumstances.   Full-time students are not expected to contribute towards your rent and council tax so there won’t be a further reduction based on their income or circumstances.

If your child is moving away to study and you rent from a housing association or your local council, you might be concerned about whether you will be affected by the ‘bedroom tax’, otherwise known as the ’removal of the spare room subsidy’. This is when your housing benefit payments  are reduced if you’re deemed to have a spare room. If you are living in private rented accommodation you might be concerned about whether you are still allowed a room for your child under the ‘local housing allowance’ rules. The bedroom tax and local housing allowance rules are complex and will depend on your child’s circumstances. You could seek further advice on this from Shelter’s Housing Advice Helpline.

Am I entitled to child maintenance?

If your child goes to university you’re no longer entitled to child maintenance through the statutory system (through the Child Support Agency or the Child Maintenance Service). If you have an open case with the Child Support Agency or the Child Maintenance Service you need to let them know about the change of circumstances. If you were receiving payments for arrears owed to you before your child went to university, these should still be collected even if your child is no longer eligible for ongoing maintenance.

See our factsheets for more information on enforcing payments of child maintenance through the Child Support Agency or the Child Maintenance Service. If you have a court order for maintenance this may continue until after your child has left university – but this will depend on the terms of the order. In some limited circumstances it is possible to arrange child maintenance for university students through the courts.”

Universal Credit – If you are in receipt of Universal Credit, the child element for that child will stop and if you are working, you will no longer be eligible for the work allowance (unless you receive a disability benefit like PIP of DLA. )

Your Child Is Leaving Education ( Source When your child turns 16 or leaves education – Gingerbread )

My child is leaving education and going into work or an apprenticeship

If your child is not in full-time education and working in paid employment or completing an apprenticeship, they are not considered to be your dependant. This means your benefits for them will stop.

Once your child leaves education you will need to tell the Tax Credit Office and the Child Benefit Office. You could be overpaid child benefit and tax credits if you don’t report your child’s change in circumstances, and HMRC will reclaim the overpayment back from you.

If you receive working tax credits they may be affected, depending on whether you have any other dependent children. As a single parent with a dependent child you need to work 16 hours or more to be eligible for working tax credits. If you don’t have any other dependent children you must work 30 hours a week or more and have a lower income to be entitled to working tax credit, so if it is your only or youngest child that is leaving education you may no longer by eligible. Different rules apply if you have a long term health condition or disability.

If you’re claiming housing benefit and/or council tax reduction tell your local council straight away if your child leaves education or training and starts work. Your child is no longer considered to be your dependant so the amount of housing benefit and/or council tax reduction you receive may go down, depending on your income and circumstances. If your child is  18 or older they will be expected to give you money towards the cost of the rent and council tax based on how much they are earning. An amount will be deducted from your benefit, called a non-dependant deduction.

Note that if your child is on an apprentice scheme they are exempt from council tax, although they will need written evidence from their employer. See here for details.

You’re no longer entitled to child maintenance through the statutory system (through the Child Support Agency or the Child Maintenance Service). If you have an open case with the Child Support Agency or the Child Maintenance Service you need to let them know about the change of circumstances.

My child is leaving education, but they don’t know what they’re going to do

If your child is aged 16 or 17 you can continue to get child benefit for up to 20 weeks after they have left education or training. This is called the child benefit extension period. You need to apply for a child benefit extension within three months of the date when your child’s education or training finished. The child benefit extension period lasts 20 weeks or until your child’s 18th birthday, whichever comes first. Your child must not be claiming certain benefits for themselves during this time, and must not be working for 24 hours a week or more. They will need to sign up with a careers service. You can find more information on the extension on gov.uk.

You can continue to receive child tax credit and working tax credit during the child benefit extension period. You need to notify the Tax Credit Office within three months of the date your child left education or training that they registered with a careers service. After the extension period your child tax credit will stop.

If you receive working tax credits they may be affected, depending on whether you have any other dependent children. As a single parent with a dependent child you need to work 16 hours or more to be eligible for working tax credits. If you don’t have any other dependent children you must work 30 hours a week or more and have a lower income to be entitled to working tax credit, so if it is your only or youngest child that is leaving education you may no longer by eligible. Different rules apply if you have a long term health condition or disability.

If you’re claiming housing benefit and/or council tax reduction tell your local council straight away if your child leaves education or training. Your housing benefit and council tax reduction shouldn’t be affected during the child benefit extension period (see above). When child benefit stops your child is no longer considered to be your dependant so the amount of housing benefit and/or council tax reduction you receive may go down, depending on your income and circumstances.

Universal Credit – Universal Credit – If you are in receipt of Universal Credit, the child element for that child will stop and if you are working, you will no longer be eligible for the work allowance (unless you receive a disability benefit like PIP of DLA. )

Examples of How This Could affect You Financially 

As I stated earlier, I know from personal experience the devasting impact it can have on your income once your children leave school/further education.  Unfortunately, my 2 sons left education at the exact same time so it was very difficult for me. .

Example 1

Claire is a single parent and has a 16-year-old son who is her only child.  He has left school and is doing an NVQ course at a local college.  Claire receives Universal Credit, child benefit and £300.00 per month child maintenance. 

Claire’s income will not change but she will have to ensure that she informs child benefit, universal credit and her ex partner that her son is not leaving education. 

Example 2

Julie is a single parent and her 16 year old daughter is leaving education and is going to start work.  Julie receives Universal Credit, child benefit and £400.00 per month child maintenance. Julie works full time and takes home £1200.00 per calendar month.  She lives in a privately rented property and her rent is £1100.00 per calendar month.

Julies Currant Universal Credit

£411.51 (standard allowance) + £282.50 (child element) + £1100.00 (housing element)

= £1794.01 Maximum Universal Credit

Income = £1200.00 – £293.00 (work allowance)

= £907.00

@63% = £571.41

£1794.01 – £571.41

= £1222.60 Universal Credit

£1222.60 + £400.00 (child maintenance) + £91.65 (child benefit) + £1200.00 Wages)

= £2914.25  Julie’s Total monthly income

Now let us see how this changes once her daughter has left school;

Universal Credit

£411.51 + £1100.00

= £1511.51  Maximum Universal Credit

Income -= £1200.00

@63% = £756.00

£1511.51 – £756.00

= £755.51 Universal Credit

£755.51(Universal Credit)  + £1200.00 (wages)

= £1955.51 Julies Total Monthly income

This has caused Julie’s income to decrease substantially;

£2914.25 – £1955.51 = £958.74  

Julie now has £958.74 less income per month compared to when her daughter was still at school.  Her daughter will have to pay something towards her keep but it would not fully cover the deficit. 

Also, Julie’s will no longer be eligible for the single persons discount on her council tax so her council tax payment will increase by 25 percent. 

This is a very difficult change of circumstances that really has a detrimental affect on peoples lives.  Many people will have to try and move to a property with cheaper rent or try to do extra hours at work.  The problem is the more income that you earn will decrease the amount of Universal Credit that you receive.  Please see one of my earlier articles How Your Earned Income Affects Universal Credit. – The Havering Daily for information regarding how your income affect the amount of Universal credit that you receive. 

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