How the extended paid placement impacts your Tax Credits
If you have undertaken an extended placement, you may have already seen an impact on your Tax Credits.
Tax Credits are an annual benefit and you should have alerted the HMRC that you have been in paid employment. If you have not done so yet, you will need to do this as soon as possible to avoid any overpayment of benefits in the 2020/2021 tax year.
When your paid placement ends, you will again need to alert HMRC to your new situation. If your paid hours have reduced to below the Working Tax Credit threshold, then this element of your entitlement will no longer be paid and your tax credits will be adjusted accordingly.
How will the extended paid placement impact on my Universal Credits?
If you are currently claiming Universal Credit, then taking on a paid placement will mean your new income will have been used to calculate your new Universal Credit entitlement. HMRC will have alerted Universal Credit to your new pay situation and recalculations will have been done automatically. Depending on your employment situation after the paid placement ends, you may no longer be entitled to the Universal Credit Work Allowance and you may again be subjected to the benefits cap.
To see more about how Universal Credit is worked out, see Calculating Universal Credit on the Entitled To website.
Can I claim childcare costs through Tax Credits or Universal Credit?
If you have childcare costs and were working sufficient hours, you can also make a claim for the childcare element of Working Tax Credit or Universal Credit, but only if you were not claiming childcare costs via Student finance; you cannot claim both.
What if I am not currently claiming any benefits?
Most new applications for benefits must now be made through the Universal Credit system.
If you are not currently getting benefits, it is unlikely that you would have qualified if you started claiming when you started work, as your income will include both your current student funding and your salary. However, there are some exceptions to this, especially if you have children and would qualify for the Work allowance.
If you're unsure about whether or not you qualified, please seek advice by emailing the RCN Welfare Service. Please note there are strict backdating rules for benefits applications, so please do not delay in contacting the service.
Help and support
As the situation with students during the COVID-19 paid placement period was a new and complex one for the benefits agency, there have been instances where mistakes and miscalculations have been made. If you feel that the way your benefits entitlements have been treated during or after placement have been incorrect, please get in touch with the RCN Welfare Service and we will be happy to look at the calculations and assist with lodging an appeal if there appear to be errors.