22 March 2010
This information applies to England, Wales, Scotland and Northern Ireland
If you are working, you may still be able to get benefits or tax credits if you are on a low income. It does not matter whether you are working for someone else or self-employed. The benefits you can get depend on your circumstances, your earnings and other money you have coming in, and on how many hours you work each week. There are different benefits for people who work less than 16 hours a week and for people who work 16 hours or more.
This information is mainly for people who work at least 16 hours a week. There is also information about help if you work less than 16 hours, and if you get certain benefits and then start work or increase your hours or wages.
If you have more than one job, you should add the hours from both jobs together. If the number of hours you work changes from week to week, your benefit will depend on your average hours. (see under heading Help when you start work).
If you are not sure how the hours you work will be treated for benefit purposes, you should consult an experienced adviser - for example, at a Citizens’ Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
If you work fewer than 16 hours a week, you may be able to claim Income Support or Jobseeker’s Allowance. However, if you have a partner who lives with you and works 24 hours a week or more, you will not be able to claim these benefits. Your partner may be able to claim Working Tax Credit instead (see under heading Working Tax Credit). This applies whether your partner is lesbian, gay or heterosexual and whether you are married, in a civil partnership or just living together.
You could also be entitled to some Housing Benefit and Council Tax Benefit to help with the costs of rent and Council Tax. If you have children, you can claim Child Tax Credit and Child Benefit. You can get these benefits whether or not you do any work. You may also be able to get help such as free prescriptions, free school meals, help with the costs of a new baby or help with funeral costs, depending on the benefits or tax credits you get and your income.
If you work 16 hours or more a week, you may be entitled to Working Tax Credit (see under heading Working Tax Credit). This will depend on your circumstances and how much money you have coming in. You may also be entitled to other benefits, for example, if you are on a low income you could get some Housing Benefit and Council Tax Benefit to help with rent and Council Tax. If you have children, you can claim Child Benefit and you may also be entitled to some Child Tax Credit. You do not have to be working to get Child Tax Credit, but your earnings will affect the amount you get. You may also be entitled to other help such as free prescriptions, help with the costs of a new baby or help with funeral costs (see also under heading Other help while you are on Working Tax Credit).
You may also be entitled to Return to Work Credit if you have just started working, or if you have just become self-employed and immediately before that, you were claiming certain benefits because of sickness or disability – see under heading Return to Work Credit after a period of ill-health.
You can get Working Tax Credit if you or your partner are working enough hours a week and your income is low enough. You don't need to have children to qualify.
You must be living in the UK. If you are from abroad, you may have difficulty claiming Working Tax Credit depending on your immigration status.
You can get Working Tax Credit if you or your partner are working enough hours a week and your income is low enough. You don't need to have children to qualify. It doesn't matter whether you are working for someone- else or self-employed.
If you are not sure about your right to claim Working Tax Credit because of your immigration status, you should consult an experienced adviser - for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
The number of hours a week you have to work to be able to get Working Tax Credit depend on your circumstances. There are four different ways you can qualify:-
There is an online questionnaire you can use to find out if you might qualify for WTC. Go to HM Revenue and Custom's website at: www.hmrc.gov.uk.
If you are responsible for a child or young person, you can get Working Tax Credit provided you work at least 16 hours a week and your income is low enough. A child is someone under 16, and a young person is someone who is 16, 17, 18 or 19 and still in full-time education up to A level or equivalent, or on certain approved training courses. You are responsible for a child or young person if they normally live with you or you have main responsibility for their care. You cannot usually get Working Tax Credit if your child is in local authority care.
You may be able to get Working Tax Credit for a short period after your child is 16 or leaves school, depending on when their birthday is and what they do on leaving school.
If you are on maternity leave, paternity leave or adoption leave and you normally work 16 hours or more, you can claim Working Tax Credit before you go back to work, as long as you are responsible for a child. If it is your first baby and you are not responsible for any other children, you will have to wait until the child is born, or comes to live with you before you can claim.
You can get Working Tax Credit if you are disabled provided:
The qualifying benefits include Incapacity Benefit, Disability Living Allowance,Employment and Support Allowance, Attendance Allowance, Industrial Injuries Disablement Benefit, Statutory Sick Pay, a war pension with constant attendance allowance, occupational sick pay or Income Support or National Insurance credits awarded because you have been unable to work. There are rules about how long you have to have been getting some of these benefits before you claim Working Tax Credit. Some of these benefits stop once you are working, and some carry on.
If you are disabled and you are not sure whether you qualify for Working Tax Credit, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
If you are over 50, have recently started work for 16 hours or more a week and were getting certain benefits when you took your job, you can get Working Tax Credit. So, if you were previously getting Income Support, Jobseeker’s Allowance, Incapacity Benefit or Severe Disablement Allowance, state Retirement Pension paid with Pension Credit, or certain training allowances, you may be able to get Working Tax Credit when you start work. You must usually have been getting these benefits for at least six months. If you were not entitled to benefits, but you were getting national insurance credits, you may also be able to get Working Tax Credit. In some cases you can get Working Tax Credit because someone else was getting benefit which included an amount for you.
If you are aged 50 or over and you are not sure whether you qualify for Working Tax Credit because you have recently started work, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
Even if you meet the work conditions, you will only get Working Tax Credit if you have a low enough income. Your income for tax credits is assessed on an annual basis. Whether or not you get Working Tax Credit, and how much you get, depends on your income and your circumstances. Not all your income will be taken into account (for example, maintenance and child support, most Statutory Maternity, Paternity or Adoption Pay and all Maternity Allowance paid to you is ignored). Usually, HM Revenue and Customs (HMRC) will use your income for the previous tax year to work out what you are due. You should report major changes in your income to HMRC, otherwise you may be overpaid or underpaid tax credit.
For more information, in England, Wales and Scotland, about overpayment of tax credits, see Overpayment of tax credits, in Benefits fact sheets.
The maximum Working Tax Credit you can get is calculated by adding together different elements which are based on your circumstances. There is a basic element which is included for anyone who is entitled to Working Tax Credit. There is a second adult element if you are claiming as a member of a couple although there are some circumstances where a couple will not get this. You have to claim as a couple if you live with a partner. This includes a partner of the opposite or same sex. There is a lone parent element if you are a lone parent.
There is a 30 hour element if you work 30 hours or week (or if you are claiming as a couple and you jointly work at least 30 hours).
There is a disability element if you are disabled, get certain benefits and you work at least 16 hours a week. You can also get a disability element if your partner qualifies for it or two disability elements if you both qualify. There is a severe disability element if you get the highest rate care component of disability living allowance or the higher rate of attendance allowance (you will get two of these if you and your partner both qualify).
There is a 50 plus element if you are 50 or over, began work within three months of your claim and you were getting certain benefits in the six months before you started work.
You may also be able to get a childcare element. This is equivalent to up to 80% of childcare costs provided by a registered childminder, out-of-school club or another approved provider. There is a limit on the maximum eligible weekly childcare cost which means that the most this element can be is 80% of the maximum.
| Element of Working Tax Credit | Maximum annual amount from 6 April 2009 |
| Basic element | £1,890 |
| Second adult element | £1,860 |
| Lone parent element | £1,860 |
| 30 hour element | £775 |
| Disability element | £2,530 |
| Severe disability element | £1,075 |
| 50 plus element:- | |
| Working at least 16 hours but under 30 hours per week | £1,300 |
| Working 30 hours or more per week | £1,935 |
| Childcare element (up to 80% of the maximum):- | Maximum weekly amount from 6 April 2009 |
| Maximum weekly eligible cost for one child | £175.00 (maximum payable £140.00) |
| Maximum weekly eligible cost for two or more children | £300.00 (maximum payable £240.00) |
To work out how much Working Tax Credit is due, the separate elements of Working Tax Credit which apply to you are added together. If you are entitled to Child Tax Credit as well as Working Tax Credit, your maximum Child Tax Credit is worked out at the same time and added to your maximum Working Tax Credit.
Your income for the tax year is compared to a threshold of £6,420. Usually, your income for the previous tax year is used. If your income is less than the threshold, you get the maximum Working Tax Credit (and Child Tax Credit if this applies). If your income is more than the threshold, your tax credit will be reduced. Working Tax Credit (except for the childcare element) is taken away first, followed by the childcare element. If your income is too high, you will not get any Working Tax Credit. However, you may still get some Child Tax Credit, if you are entitled, because this is the last part of your total tax credits to be reduced.
The tax credit calculation is very complicated. To get some idea of how much you should get, you can use the online calculator on HM Revenue and Custom's website at: www.hmrc.gov.uk. If you want to check exactly how much WTC you should be getting, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
To apply for Working Tax Credit, contact the tax credit helpline for an application pack. The application form for your first claim is Form TC600. The helpline number is 0845 300 3900 (textphone 0845 300 3909).
The application form requires a lot of information, including your income for the previous tax year. If you have problems filling in the form, you can consult the notes that come with it, call the helpline, or consult an experienced adviser, for example, at a Citizens Advice Bureau.
It is also important to keep as much evidence of your personal circumstances as you can. You should keep P60s (or P45s if you have left a job), statements about any benefits you receive and statements from your bank or building society about any savings. Any documentation about your income or capital (and your childcare provider if you are claiming childcare costs) will help you to fill in the form.
When you apply for Working Tax Credit, you will have to provide your national insurance number and the national insurance number of any partner who lives with you. If you don’t know your national insurance number, but you think you have one, try to provide information that will help the office find your number. If you do not have a national insurance number, you will have to apply for one.
For information on how to apply for a national insurance number, see National insurance – contributions and benefits.
You may be able to get some Working Tax Credit for a period before you apply, if you met the conditions and could have claimed earlier. Getting tax credit for a period before you apply is called ‘backdating’. You do not have to give any reasons why you did not claim earlier. When you apply ask for backdated tax credit on your application form. You can normally only get Working Tax Credit backdated for a maximum of 93 days before the date you apply.
If you want any help with claiming backdated Working Tax Credit, you should contact an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
You may commit tax credit fraud if you deliberately give incorrect or misleading information when you apply for tax credits, or fail to report a change of circumstances within one month of the change. Even if you are not committing fraud, you can cause an overpayment which will have to be repaid and you may have to pay a penalty. Your circumstances can be checked at any time while you are claiming and HM Revenue and Customs officers can also get information about you from other people including your employer or your childcare provider. They can ask you to supply bank statements and other evidence, and they may interview you. Tax credit fraud is a criminal offence and you can be prosecuted or made to pay a fine.
For more information, in England, Wales and Scotland, about overpayment of tax credits, see Overpayment of tax credits, in Benefits fact sheets.
If you are worried about whether you might be suspected of fraud, you are under investigation or you have been convicted, or if you have been asked to repay an overpayment of benefit, you should consult an experienced adviser, for example, at a Citizens’ Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
Working Tax Credit can be paid directly into your bank or building society account, or into a post office card account. If you do not give your account details to HM Revenue and Customs (HMRC), you may lose your entitlement to Working Tax Credit. If you have difficulties opening an account, you should get in touch with HMRC and explain.
For more information about payment of benefits and tax credits, see Payment of benefits and tax credits, and for more information about Child Tax Credit, see Benefits for families and children. For more information, in England, Wales and Scotland, about overpayment of tax credits, see Overpayment of tax credits in Benefits fact sheets.
If you have problems with the payment of Working Tax Credit, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
Tax credits are awarded for a complete tax year. A tax year runs from the beginning of April to the end of the following March. If you claim after April, your award will run from the date you claim to the end of the following March. The amount you get is usually set for a year. If your circumstances change during the period of your award you should tell HMRC as soon as possible. This is important because otherwise you may not be paid all the tax credit you are entitled to (an underpayment), or you may be paid too much and have to pay it back to HMRC (an overpayment). Some changes to your circumstances mean that your award ends and you have to claim again. Other changes mean that your award continues but it will be recalculated, and some will not affect your current award at all.
If your work ends, you can carry on getting Working Tax Credit for a further four weeks. This also applies if you start to work less than 16 hours a week, or in some cases, less than 30 hours a week.
For more information about overpayments, in England, Wales and Scotland, see Overpayment of tax credits in Benefits fact sheets.
If you are refused Working Tax Credit and think you are entitled, or that the amount you are awarded is wrong, you can ask HM Revenue and Customs (HMRC)to explain their decision. If you are still not satisfied, you can ask for the decision to be looked at again or you can appeal to an independent tribunal. You must do this within 30 days of HMRC's decision.
If you are unhappy with the service you have received from HMRC, for example, there have been long delays, or they have lost documents you sent to them, you should complain. You can do this whether or not you are also challenging an HMRC decision.
My partner and I have just adopted a child. We're on a low income and think we should get Working Tax Credit. As a gay couple, are we entitled to make a claim? We're also worried about how we'll be treated.
As a gay couple, you're entitled to make a claim for Working Tax Credit. Claims are dealt with by HM Revenue and Customs. They have a policy saying that they will not discriminate against you because of your sexuality. You should be treated fairly and politely whatever your sexuality. If you think you have been discriminated against, you can complain.
It's against the law for you to be treated unfairly because of your race, sex, disability, sexuality, religion or belief when HMRC decide about your Working Tax Credit claim. Also, HMRC has a policy which says they will not discriminate against you because of other things, like if you've got HIV or if you have caring responsibilities. If you feel that you've been discriminated against, you can make a complaint about this.
For more information about making a complaint, see Problems with benefits and tax credits.
If you are not happy with a Working Tax Credit decision or you want to make a complaint, you can also consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
You can get most HM Revenue & Customs leaflets about tax credits in Braille, audio, CD and large print on request. Leaflets about tax credits are also available in a number of community languages. To get copies, ask at your local HMRC office or Enquiry Centre. Most Enquiry Centres can also offer:
You can find out where your nearest Enquiry Centre is by looking on HMRC's website at: www.hmrc.gov.uk.
When you get Working Tax Credit, you may be entitled to other financial help. If you pay rent, you may be able to get Housing Benefit. If you have to pay Council Tax, you may be able to get Council Tax Benefit. Working Tax Credit is taken into account as income for both these benefits which means that it affects the amount of Housing Benefit and Council Tax Benefit you can get.
For more information about Housing Benefit, see Help with your rent - Housing Benefit, and for more information about Council Tax Benefit, see Help with your Council Tax – Council Tax Benefit.
Being on Working Tax Credit may also give you other help. For example, you may be entitled to health benefits, including free prescriptions. You may also be able get help with the costs of a new baby from a Sure Start maternity grant or help with the costs of a funeral from a funeral payment. Whether or not you can get this help will depend on your income, whether you get a disability element with your Working Tax Credit and whether you also get Child Tax Credit.
For more information about health benefits, see Help with health costs, and for more information about maternity grants and funeral payments, see Help for people on a low income – the Social Fund.
You may be able to get some help with the costs of starting work if:
Some kinds of help will depend on how long you have been unemployed, and some types of help are only for people on certain government schemes or training. If you want to find out what help you can get, you should ask at the Jobcentre.
When you start a new job, or increase your hours or wages, so that you come off certain out-of-work benefits, you may continue to get Housing Benefit and Council Tax Benefit paid at the same rate for the first four weeks of your new work arrangements. This extra benefit is known as ‘extended payments’. To qualify you must have been getting Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Contributory Employment and Support Allowance, Severe Disablement Allowance or Incapacity Benefit for at least 26 weeks before the change in your working circumstances. You can also get an extended payment if these benefits have stopped because your partner got a new job or increased their hours or wages.
You must tell your local authority about your new job or increase in hours or pay within four weeks of it starting. (In Northern Ireland this will be the Housing Executive.) If you are on a low income and will still be entitled to some Housing Benefit or Council Tax Benefit in your new job, you can carry on getting the benefit.
For more information about Housing Benefit, see Help with your rent - Housing Benefit, and for more information about Council Tax benefit, see Help with your the Council Tax - Council Tax Benefit.
If you want to claim an extended payment and you are not sure if you qualify, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
If you are getting help with mortgage interest paid with your Income Support or income-based Jobseeker’s Allowance, you may be able to get this paid for the first four weeks that you are in work, or increase your hours. This is called the ‘mortgage interest run-on’.
You must have been getting Income Support or income-based Jobseeker’s Allowance for at least 26 weeks, and you (or your partner) must have taken up a job, or increased your hours, so that you are no longer entitled to these benefits.
You should let the benefits office or Jobcentre know that you are starting full-time work as soon as possible.
If you are not sure whether you qualify for the mortgage interest run-on or you want more information, you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
There may be help available for parents who were on benefits and who look for work or start work. Some help is just for lone parents, and in some areas, it is available for all parents. For example, as a lone parent, you may be able to get help with travel costs and the costs of registered childcare while you are looking for work. Another scheme, called the in-work emergency discretion fund, may help you cope with unexpected financial problems which could stop you carrying on with your job. You could get a payment of up to £300. The fund only makes discretionary payments and your Jobcentre Plus personal adviser makes the decision about whether you should get the money.
If you want to find out what help you can get, you should ask at your Jobcentre Plus office.
You should let Jobcentre Plus office know about your new job, or increase in hours, as soon as possible.
For more information about schemes which can help you to come off benefit and start a new job, see Government employment schemes.
If you want more information about starting work, you can also contact an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.
Return to Work Credit is a payment of £40 a week. You can get it if you go back to work after a period of ill-heath, as long as you have been claiming certain benefits.
It is payable for a maximum of twelve months.
Return to Work Credit is non-taxable and is not counted as income if you're claiming Housing Benefit or Council Tax Benefit. It is possible for Working Tax Credit and Child Tax Credit to be paid at the same time as Return to Work Credit.
Return to Work Credit has been introduced as part of the Pathways to Work Scheme and is delivered by Jobcentre Plus. For more information about Return to Work Credit and the Pathways to Work scheme, you can ask at your local Jobcentre Plus office or go to the Jobcentre Plus website at: www.jobcentreplus.gov.uk.
You can get Return to Work Credit if you have been getting one or more of the following benefits paid because of sickness or disability:
You must usually have been getting these benefits for 13 weeks immediately before starting work. However, you could still get Return to Work Credit if you haven't been claiming one of these benefits for 13 weeks, as long as you were claiming Statutory Sick Pay for 13 weeks before making the claim for the benefit.
You must work for at least 16 hours a week in a job that is expected to last for more than five weeks and you must earn no more than £15,000 per year. You qualify for Return to Work Credit if you become self-employed as long as you meet the other conditions.
You must apply to your local Jobcentre Plus office within five weeks of starting work.
Return to Work Credit is paid into your bank or building society account or into an existing Post Office card account. In exceptional cases, it will be paid by cheque.
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