Child benefit & tax allowance. What income is taken in to accoutn when calculating these please?

Question

My sisters husband died last September. She gets a monthly payment from his insurance company and she received a lump sum from his pension. When we resubmitted the form to Dept of Social Security to let them know she is now single parent, we declared the insurance payment and the lump sum but they have calculated her benefits without these taken in to account as they said they didn't need to. Is that correct? Has that something to do with the nature of the income? We are worried she is getting more than she is entitled to and this may cause problems in the future

Answer 1

Cild Benefit is a fixed allowance and any parent is entitled to it. Her 'Tax Allowance' is the amount of income she can receive before paying tax.

Answer 2

Everybody gets child benefit irrespective of what wealth they have.  Even millionaires get it.

Tax credit is depended on Income whether it be Earned Income or Investment Income like dividends or bank Interests.  Capital amount is not taken into account.  Her pension from past employer or from insurance company will be taken into account for Tax credit purposes.