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FOOL SCHOOL
Remember that embarrassing itch? Oh go on, we've all had the embarrassing itch. And remember how, when you blurted out your fears on a drunken girls' night out, your girlfriends roared with laughter and told you that if you stopped wearing nylon lacy thongs there would be no need of penicillin?
Well, Working Families' Tax Credit (WFTC) works a bit like that. No-one likes to talk about it, but you'd be surprised how many are claiming it. We should also point out that this benefit will be replaced by the Working Tax Credit from April 2003 onwards.
There is a huge culture of fear about "going on the social", and I have to admit to feeling chuffed when our first claim failed. Hurrah, we could still hold our heads high in the Chianti-drinking classes.
The conspiracy theorist in me would say that replacing tax concessions with benefit claims is a cynical manipulation of people's fears, placing the onus on claiming rather than receiving. Thousands of proud citizens, from pensioners to middle income families, have recently found themselves in the role of "claimant", something that is still a social stigma for many of us.
Consequently there is a huge under-claiming of welfare funds in the UK. This ranges from the elderly not "topping up their pensions", their carers not claiming attendance and mobility allowances, to the struggling self-employed, or indeed teachers and nurses, thinking that to claim "benefit" is an admission of failure.
For families, in particular, the reality is that there is extra money out there for you if you need it. You'll have to find the time and the energy to fill in a few forms and get to grips with your income from the past six months. And that's on top of all the washing, ironing, delivering to clubs, sweating over Maths homework and all the other little jobs that every parent has to do to keep the next generation of pension fund managers healthy and happy -- God bless their little cotton S-Club7 socks! But our present government seems to have a firm policy of trying to aim more money at those who really need it, so perhaps we are just going to have to get used to the process of claiming and means-testing.
If you're employed in a Pay-As-You-Earn job (PAYE), filling in the forms is relatively easy. You'll have wage slips to show how much you earned over the past six months. If your partner is also earning then that will need to be detailed too.
However if either of you poor souls are one of that noble breed of entrepreneurs otherwise known as the Self-Employed then you will then have to drag yourself through the mire of book-keeping and receipt hunting, when of course you could be looking for work.
What's the Deal?
The amount of Working Families' Tax Credit (WFTC) depends on the number and age of children in the family, the income coming into the household, the hours you work and the amount of childcare charges paid. It is paid for six months after which you have to re-apply.
To qualify you must be:
If your income is £94.50 a week or less you should get a combination of:
If you earn more than £94.50 a week, your maximum WFTC will be reduced by 55 pence for each £1 of income above £94.50. You can find sample calculations at the Inland Revenue's website.
In theory, it's possible to earn more than £30,000 and still be entitled to receive WFTC. So, if money is tight, and the sums for WFTC work out for you, you could at least have the certainty of extra cash for six months. Tempted?
Practical Experience
Me and my husband (I know, that's bad grammar -- I just can't bring myself to write "my husband and I") have both been self-employed for over ten years (I thank you).
To be self-employed you have to be, by definition, willing to go it alone and be pretty single minded. You learn to rely on your own resources and abilities to find work. And, occasionally, around birthdays and Christmas, you find yourself looking at postcards in the post office offering part-time jobs whilst you queue to pick up Child Benefit -- that ray of financial sunshine on the overdrawn calendar telling you that every four weeks there will be definitely be some cash.
In fact, if you look at the front of your Child Benefit Book you'll find the legend: "If you have one or more children living with you and your or your partner work 16 hours or more a week you could be eligible for WFTC."
We seemed to qualify. We certainly worked more than 16 hours a week, we had children living at home, and no, we didn¹t have more than £8,000 savings in the bank. Home and dry on this one it appeared. So we got the forms.
We ran into the problem that we were applying for WFTC as well as Invalidity Benefit as The Beard had had a pretty major op that meant he couldn¹t work for at least 6 weeks, so in fact he couldn't work the required 16 hours a week. If, however, he was getting Invalidity Benefit, it would count as working. But, as Invalidity Benefit is administered by Social Services and WFTC is administered by the Inland Revenue, we were caught between the two. Both required originals of all documentation (no photocopies allowed) and they required different periods of accounts.
The cumbersome nature of the system is breathtaking. I tried to be reasonable, pointing out to The Beard that they must be thorough, they can't just hand out cash to anyone who turns up asking for it. However, we were put in the ridiculous situation of having to apply for more benefit than we felt we strictly needed. All we wanted was help over the six-week period where The Beard was unable to work, but WFTC is paid at the same rate for 26 weeks, even if your income goes up.
We got turned down on our first application, because we'd earned "too much" in the six months prior to our application - I certainly hadn¹t noticed this apparent period of bounty! As soon as The Beard was able to work we tried again. This time the six-month period took into account the six weeks the Beard had been signed off work, but included a time when he had been earning as well. We were successful.
Do I feel guilty when the money appears in my account every other week now we are both working and things are easing up? Yes, in all honesty I do, but realistically, this money is being swallowed up paying the debts accumulated when things were tight earlier on.
So, if you are one of the 1.5 million people expected to qualify for WFTC, I think you should apply for it immediately. After all, the Government have spent £12m on advertising it: it would be churlish, surely, to ignore them!
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