Tax Credit Debt Management Issue 1 Winter2005 AdviceQuarterly Sharing information to empower the local community in Kensington & Chelsea Welcome Kensington and Chelsea Independent Legal Advice Services (KCILAS) is a consortium of advice providers. The members of this group are detailed on the back page of Advice Quarterly. KCILAS is committed to an ethos of partnership between our members to facilitate the delivery of quality independent advice services which benefit the citizens of the Royal Borough of Kensington and Chelsea and which are based upon a clear picture of local needs. Our values and principles are as follows:- To promote empowerment and improve the quality of life of the most marginalised groups living in the Royal Borough Commitment to an accessible and client centred service To intervene effectively and provide realistic and practical advice to service users to achieve successful outcomes To ensure our service is inclusive and reaches all communities. Advice Quarterly is a newsletter produced by KCILAS intended to provide relevant information on advice issues that can be used by community groups working with local people living in the Borough. We welcome comments and would be particularly interested in hearing what kind of topics you would like us to cover in future issues. There are many very useful organisations working in the voluntary sector and we hope to profile some of these in later editions of Advice Quarterly. KCILAS: Helping people to access their rights. Child Trust Funds - Government Giveaway! Children born on or after 1 September 2002 have an entitlement to a Child Trust Fund (CTF), a savings account, and the Inland Revenue will be issuing vouchers between January March 2005 worth at least 250. A second payment will be made on the child s 7th birthday. Other people can put up to a total of 1,200 into the CTF per year. You can open an account but it has to be with an approved provider. CTF belongs to the child and can be used by them when they are 18. Considering your needs Contact info@nklc.co.uk if you require this information in a different format or a community language. We welcome comments from community organisations or groups on this publication. Tell us what information topics would be useful for you. contents Page 2-3 Page 4-5 Page 6-7 Page 8 Tax credits winterfuel payments Find your nearest advice provider Controlling your debt Contact details for KCILAS members
AdviceQuarterly Lending you a helping hand Working Tax Credit is a means-tested allowance for people who are in paid employment on a low income, with or without children. What are Tax Credits? Working Tax Credit (WTC) and Child Tax Credit (CTC) are benefits administered by the Inland Revenue. Working Tax Credit is a means-tested allowance for people who are in paid employment, with or without children, on a low income. Additional amounts are payable if people have childcare costs, if they work more than 30 hours per week, if they have a disability. Child Tax Credit is a means-tested allowance for parents/carers of dependent children. Who can get tax credits? Working Tax Credit You may qualify for Working Tax Credit if you or your partner fit into the circumstances below:- aged 16 or over, working 16 hours per week or more and have a disability for which you receive a qualifying benefit: or aged 16 or over, working for 16 hours per week or more and you have responsibility for a child or a qualifying young person (a qualifying young person means aged 16-19 who is in full-time education); or aged 25 or over and working 30 hours or more per week; or aged 50 or over, working 16 or more hours per week and have only started the job within the 3 months prior to your claim AND for 6 months prior to starting work you received one of the qualifying benefits; or You are on maternity leave but you normally work 16 hours per week or more. Child Tax Credit You may qualify for Child Tax Credit if you or your partner fit into the circumstances below:- aged 16 or over 2
Tax Credits & Winter Fuel Payments Important links and information Inland Revenue www.inlandrevenue.gov.uk. The Royal Borough of Kensington and Chelsea www.rbkc.gov.uk Community Legal Service Direct www.clsdirect.org.uk Citizens Advice Bureau www.adviceguide.org.uk Multikulti Advice in Community Languages www.multikulti.org.uk The Department for Work and Pensions www.dwp.gov.uk have a gross income below 50,000 a year. you have a child who you are responsible for aged under 16 or a qualifying young person between the ages of 16-19, who is in full-time education, or aged 18 and have finished full-time education in the last 20 weeks who has been registered with the Careers service. How to apply for working tax credit and child tax credit apply online @ www.inlandrevenue.gov.uk/taxcredits phone the helpline on 0845 300 3900 (text phone 0845 300 3909) get a form from Inland Revenue Enquiry Offices, or Jobcentre Plus Offices. How they are paid Child Tax Credit is normally paid into a bank/building Society or post office account. Working Tax Credit is normally paid with your salary via your employer. It is very important that you notify Inland Revenue of any changes in your family/income circumstances, as an overpayment/underpayment can result if you fail to do so. To find out if you may be entitled to Working Tax Credit and Child Tax Credit and to get an estimate of how much you may be entitled to, use the Inland Revenue website at www.inlandrevenue.gov.uk. REMEMBER If in doubt claim Inland Revenue can only say no! But you may be pleasantly surprised by qualifying for tax credits. Winter Fuel Payments A winter fuel payment is a tax-free payment for people aged 60 or over, intended to help pay fuel costs. You qualify for a winter fuel payment if:- you are aged 60 or over in the week beginning on the 3rd Monday in September (this is called the qualifying week ) and you are ordinarily resident in Great Britain (please note though that if this does not apply, you may be entitled to a payment if you reside in another European Economic Area or Switzerland) and you claim in time (if a claim is required) and you are not in the excluded criteria below. Exclusions you are receiving free in-patient treatment in hospital and have been for more than 52 weeks you are detained in custody under a sentence you receive Pension Credit or Income-Based Job Seeker s Allowance and you live in residential care and you were living in residential care in the qualifying week and the 12 weeks before the qualifying week you are subject to immigration control you do not normally live in the UK You are the partner of someone aged 60 or over who qualifies in their own right to a payment. Amount The winter fuel payment has 4 rates 100 if you are under 80, living in residential care in the qualifying week, not getting Pension Credit or Income-Based Job Seekers Allowance. 150 if aged 80 or over and all the other conditions above are met 200 if you are aged under 80 in the qualifying week 300 if you are aged 80 or over in the qualifying week. How to get a winter fuel payment Some people will receive a winter fuel payment automatically without having to claim (usually those on Retirement Pension or Incapacity or Disability Benefits). Otherwise, you should make a claim from the Department of Work and Pensions (DWP), or the Winter Fuel helpline. You should claim before 31 March. Winter Fuel Helpline 0845 915 1515 Text phone 0845 601 5613 Challenging Decisions You can challenge a decision not to award a Winter Fuel decision. You should do this in writing and within one month of receiving the decision. Your local advice centre/law centre can help. 3
020 8960 6654 Moroccan Information Advice Centre Advice on housing, welfare benefits and education. Supplementary Saturday school for children from the Moroccan community. Moroccan Information Advice Centre 61 Golborne Road London W10 5NR Tel: 020 8960 6654 Fax: 020 8968 0428 Monday Friday 10am 1.00pm & 2.00pm 5.00pm adviceguide.org.uk Kensington Citizens Advice Bureau Legal advice on welfare benefits, employment, immigration, debt, utilities and other legal matters. Kensington Citizens Advice Bureau 140 Ladbroke Grove, London W10 5ND Fax: 020 8968 4281 Monday, Tuesday, Wednesday & Friday 10am 12.30pm Chelsea Citizens Advice Bureau Chelsea Old Town Hall, Kings Road, London SW3 5EE Fax: 020 7351 5240 Monday, Wednesday, Thursday & Friday 10am 12.30pm A dedicated telephone advice service 0870 122 2313 4
Kensington & Chelsea Independent Legal Advice Services Consortium Members nklc.co.uk North Kensington Law Centre Legal advice on education, employment and discrimination, housing, immigration and welfare benefits. North Kensington Law Centre 74 Golborne Road London W10 5PS Tel: 020 8969 7473 Fax: 020 8968 0934 Email: info@nklc.co.uk Web: www.nklc.co.uk Monday, Tuesday, Thursday, Friday 10am 1.00pm and 2.00pm 5pm Wednesdays 2pm 5pm. nucleus.org.uk Nucleus Legal Advice Centre Legal advice on housing, welfare benefits, immigration, debt, and other social welfare matters. Nucleus Legal Advice Centre 298 Old Brompton Road London SW5 9JF Tel: 020 7373 4005 Web: www.nucleus.org.uk General Enquiries & Immigration: Mondays 1.30pm 4pm General Enquiries & Housing: Tuesdays 3.30pm 6pm General Enquiries & Benefits: Thursdays 10am 12.30pm wenac.org.uk World s End Neighbourhood Advice Centre Legal advice on housing, welfare benefits, immigration and debt. World s End Neighbourhood Advice Centre 2 World s End Place, Kings Road, London SW10 0HE Tel: 020 7351 5749 Fax: 020 7351 5512 Email: info@wenac.org uk Web: www.wenac.org.uk Accident & injury session (appointment only) Tuesday 2pm 4.30pm Housing advice session Friday 10.30am 1pm The advice surgery Mondays, Wednesdays, Fridays 10.30am 1.00pm 5
AdviceQuarterly Valuable Information for those in debt Debt can arise for many reasons, including relationship breakdown, loss of job, or sudden change in income. If you find yourself in debt, first of all don t panic. Read the information here, or contact your local advice centre for help. You can also get advice from the internet and there is a list of useful web addresses in this newsletter. Firstly, if you fall into debt, you should stay in touch with creditors and advise them of any financial difficulties immediately. If you are going to seek help from an advice centre/law centre, creditors should be informed that an agency's advice is being sought, particularly if you have to wait for an appointment at the agency. Creditors generally welcome the involvement of a specialist agency and the individual will find it much easier to reach agreement with this advice behind them. Steps to be Taken by the Individual in Debt Never ignore the debt. You should work out your income and expenditure. This budget should show if you have any leftover money which could be paid to creditors. It is also a useful exercise to identify areas in which money could be saved. You should make a complete list of debts, working out which are priority debts and which are non-priority. Priority debts must be paid first. You should contact your creditors as soon as possible and explain the situation. Do this in writing and keep a copy. You may be asked to show them your income and expenditure If you are unable to negotiate with the creditors yourself, you should seek help from an advice centre/law centre. This is particularly important if you are considering using a debt management company (who may charge you) or taking out a consolidation loan (which may attract high interest). Negotiation with Creditors Negotiation with creditors can be lengthy and difficult. Creditors will want to know the following: What other debts you have Whether you have any assets that can be sold to cover 6
Debt Management Important links and information National Debt Line www.nationaldebtline.org.uk. Citizens Advice Bureau www.adviceguide.org.uk Card Watch www.cardwatch.org.uk Home Office Identity Fraud Steering Committee www.identitytheft.org.uk The Financial Services Authority www.fsa.gov.uk Office of Fair Trading www.oft.gov.uk the debt Whether you have any available income Whether your situation is likely to improve or worsen Whether you have a spouse or partner who could pay the debt Priority Debts Priority debts include the following: Mortgage arrears/rent arrears which could lead to you losing your home through repossession Unpaid income tax and VAT which could lead to imprisonment Unpaid fines such as those applied by magistrates courts which could lead to repossession of goods or even imprisonment Unpaid maintenance payments which could lead to repossession of goods or imprisonment Unpaid council tax which could lead to repossession of goods or imprisonment Fuel debts and water rate debts which could lead to the supply being disconnected Hire purchase arrears (if the item bought is an essential one) which could lead to repossession of the item Priority debts, as the name implies, must be paid off before any other non-priority debts. Non-Priority Debts Non-priority debts may include the following: Credit cards/store cards/catalogue Bank overdrafts or loans (a loan secured on your home is a priority debt) Benefits overpayments Hire purchase for non-essential items Money borrowed from family or friends Non-priority debts do not lead to imprisonment. However, you can be taken to court if you do not pay so explain and negotiate, don t ignore them! Credit Checks Falling into debt can affect your ability to get credit as your credit reference file may display the debt. Credit reference agencies collect information and pass it to lenders and the lender uses this to make a decision on whether or not to lend. If you want to check your credit reference, contact these agencies: www.experian.co.uk www.equifax.co.uk www.callcredit.co.uk Repayment Plans Negotiation can start when creditors know what you owe, to whom, and what your income/expenditure is. Priority creditors will take a strong stand and you need to remember that you will have to pay anything that you are currently liable for (eg. rent, mortgage or council tax etc) AS WELL as an amount towards the arrears owed. In general, with non-priority debts, the size of the repayment will correspond with the size of the debt. There is a pro-rata calculation for working out the offers of repayment that you make. Once you work out what available cash you have for creditors you will need to You should make a complete list of debts, working out which are priority debts and which are non-priority. take away the amount that you have to pay for priority debts.this will then leave you a figure for non-priority debts (in some cases you may have nothing left). If you have an amount to be distributed amongst non-priority creditors, you should multiply this figure by each debt and divide it by the total amount owed to work out what each creditor will get. If you do not have any money left to pay non-priority creditors, you need to show this. You can then ask the creditors to wait until your situation improves, or offer a token payment of 1.00 per month each. This is called asking for a moratorium. Remember that there are many places to get help with managing your debts. Besides local advisers, you can get help from the national debtline on www.nationaldebtline.org.uk and www.adviceguide.org.uk 7
Kensington & Chelsea Independent Legal Advice Services Consortium All of the Consortium members offer appointments outside of their reception drop in times and, where appropriate and resources permit, offer home visits. Advice is available in various community languages and, if necessary, interpreting services are used. The Consortium members have a referral protocol between the agencies which aims to match the client s advice needs with the most appropriate source of that advice and they work in close partnership with one another to develop a strategic approach to the planning and delivery of legal advice services in the Borough. The Borough s website www.rbkc.gov.uk has information on community organisations. The members of the Consortium who produce Advice Quarterly: Kensington & Chelsea Citizens Advice Bureau. KC CAB Services is an independent advice agency with premises in both the North and South of the Borough.They advise people living, working or studying in the Borough. The main areas of advice are welfare benefits, housing, employment, immigration, debt, utilities and other legal advice. Kensington CAB Service Westway Information Centre 140 Ladbroke Grove W10 5ND. In addition to the generalist advice provision outlined above, it has a specialist debt and immigration unit. First time callers can access the reception advice surgery at the following times: Monday, Tuesday, Wednesday and Friday 10am 12.30pm. Fax: 020 8968 4281 Chelsea CAB Service Chelsea Old Town Hall King s Rd SW3 5EE. The reception advice surgery can be accessed at the following times: Monday, Wednesday, Thursday and Friday 10am 12.30pm. Fax: 020 7351 5240 A dedicated telephone advice service provided by the Citizens Advice Bureau can be contacted on 0870 122 2313. Additionally, advice is provided on their website at www.adviceguide.org.uk. Moroccan Information and Advice Centre 61 Golborne Rd W10 5NR The Moroccan Information And Advice Centre (MIAC) is an independent advice service providing information and advice on housing, welfare benefits and education for the Moroccan community living in and around the Borough. They also help community groups and work in the field of project development.there is a supplementary Saturday school for children on main curriculum subjects and mother tongue. Their reception advice surgery can be accessed Monday Friday 10am 1.00pm & 2.00pm 5.00pm Tel: 020 8960 6654 Fax: 020 8968 0428 North Kensington Law Centre (NKLC) 74 Golborne Rd W10 5PS North Kensington Law Centre provides a free and independent specialist legal service to the community in the Borough and promotes access to legal rights and equality of opportunity. The main areas of the advice service are education, employment and discrimination, housing, immigration and welfare benefits. Their reception advice surgery can be accessed at the following times: Monday, Tuesday, Thursday, Friday 10am 1.00pm & 2.00pm 5pm Wednesdays 2pm 5pm. Tel: 020 8969 7473 Fax: 020 8968 0934 Email: info@nklc.co.uk Web: www.nklc.co.uk Nucleus Legal Advice Centre (Nucleus) 298 Old Brompton Rd SW5 9JF Nucleus is an independent advice centre that gives advice and assistance on social welfare matters. In addition to the generalist advice service, Nucleus has specialist units in immigration, debt, housing and welfare benefits. The reception advice surgery can be accessed at the following times: General Enquiries and Immigration Mondays 1.30pm 4pm General Enquiries and Housing Tuesdays 3.30pm 6pm General Enquiries and Benefits Thursdays 10am 12.30pm Tel: 020 7373 4005 Web: www.nucleus.org.uk World s End Neighbourhood Advice Centre (WENAC) 2 World s End Place SW10 0HE WENAC provides a generalist advice service to people living or working in the Borough in the areas of housing and debt and has specialist units in immigration and welfare benefits. Accident and injury session Tuesday 2pm 4.30pm (appointment only) run by Leigh Day Solicitors. Housing advice session Friday 10.30am 1pm (appointment only) run by Housing Advice Service Kensington & Chelsea. (From March 2005) Disability issues advice session Monday 2pm 5pm run by Action Disability Kensington & Chelsea. The reception advice surgery can be accessed Mondays, Wednesdays, Fridays 10.30am 1.00pm Tel: 020 7351 5749 Fax: 020 7351 5512 Web: www.wenac.org.uk Whilst every effort is made to check the accuracy of information contained in Advice Quarterly, neither KCILAS nor any individual member of this consortium can be held responsible for any loss, damage or inconvenience caused by any inaccuracy in this publication. Advice Quarterly is brought to you by Kensington and Chelsea Independent Legal Advice Services. KCILAS 2005 Design by Lawrence & Beavan 8