Claimant lives with daughter aged 17, who is still at school. Claimant only works 20 hours a week on minimum wage, as was told would loose tax credits / housing benefit or have benefits reduced if worked longer than 20 hours per week. Could anyone clarify working hours for single parents, as I don't think this is correct?

Lone parents have to work 16hrs/wk minimum to get WTC, don't need to work at all for CTC of course, and there is no maximum hours limit for either. It could be the case that there would be little financial gain overall if she increased her hours however. Increased earnings generally results in reduced tax credits, and the earnings and tax credits will be taken into account as income for the Housing Benefit anf Council Tax Benefit. There is a "poverty trap" for tenants here. Remember though that her Tax Credit entitlement for this tax year will still be based on last years lower earnings, provided the difference is less than £25000, so the current TC award may not reduce.

Thank you for your helpful clarification

Mon 10-Aug-09 11:24 AM by bensup

However if the 17year old is your clients only or youngest child he or she should be considering working at least 30 hours per week if they can - the 17 year old will not be at school forever and, once they leave your client will need to be working 30 hours in order to still be able to claim working tax credit.