# BENEFITS EXPERT: Will you lose out under Working Tax Credits cuts?

### I know that, because of the Budget welfare reforms, my Working Tax Credit (WTC) will be cut. But by how much? Can you tell me what it will be reduced by, so I can plan my finances accordingly?

Virtually everyone who has WTC included in their Tax Credit (TC) calculation will get less under the new rules which come in next April.

As TCs are based upon individual circumstances and worked out on a sliding scale, the amount of the reduction will not be the same for all.

However, if you get WTC at present and earn more than £123 a week gross, there is a calculation you can do to work out roughly what you can expect to lose.

These are the steps of the calculation:

• Work out, to the nearest pound, your average weekly wages before the deduction of Income Tax and National Insurance.

• Deduct £123 from this amount.

• Divide what you are left with by 14, and round to the nearest pound.

• Add £23 to this amount.

If your answer is more than your TC rate, you will lose your entitlement from April. If it is less, this is the amount by which your TC will be cut.

As an example let us take someone I shall call Jane.

She earns £333 a week and receives £70 a week in TC.

Deducting £123 from her £333 wages leaves £210.

Dividing this £210 by 14 makes £15.

Adding £23 to this £15 makes £38.

This £38 is less than Jane’s TC of £70, so it is this amount by which her weekly TC will be reduced under next year’s rules. It leaves her with around £32 a week.

People earning under £123 a week will lose up to £23 a week.

The less they earn under £123, the less they will lose. But the only ones who will lose nothing will be those earning under £74 a week.

As someone has to work at least 16 hours a week to get WTC, there will not be many of them.

I get Child Tax Credit (CTC) for three children, but have heard you will only be able to get it for two children in future. Will I be affected?

No. This is because you are receiving it for three children now, and the change will only affect certain families who will have children born from April 2017.

Under existing rules, each additional child can increase CTC by up to £53 a week.

People who have a third or subsequent child after April 2017, however, will not receive additional CTC.