What is Working Tax Credit and how does it work? WTC is a means-tested benefit used to boost weekly earnings of working people on a low income.
WTC CHANGES: The government is integrating Working Tax Credit into its eventual replacement called Universal Credit.
Use this help guide to find out if you are eligible for WTC. There is extra information for those who already qualify for Working Tax Credits.
Working Tax Credit eligibility 2022 depends most on whether:
You must be working a minimum number of hours a week and get paid for the work you do. Your income needs to be below the Working Tax Credit threshold 2022 to get the benefit.
The tax credits table below shows the basic amount for Working Tax Credit entitlement 2022. In some cases, this means tested benefit may be worth up to £2,005 a year. The Working Tax Credit amount you get will depend on your circumstances and your income.
Those without children can still apply for Working Tax Credit. You may also qualify if you are on leave from work or ready to start a new job.
The extra amounts you can get on top of the basic amount are better known as the 'elements'. Currently, the basic amount could grant you £2,005 a year.
|Working Tax Credit Elements||Working Tax Credit Entitlement|
|If you are in a couple and applying together||WTC up to £2,125 a year|
|If you are a single parent||WTC up to £2,125 a year|
|If you work at least 30 hours a week||WTC up to £860 a year|
|If you have a disability||WTC up to £3,345 a year|
|If you have a severe disability||WTC up to £1,445 a year (usually on top of the disability payment)|
|If you pay for approved childcare||WTC up to £122.50 (1 child) or £210 (2 or more children) a week|
Money from Working Tax Credit goes directly into your bank or building society account. The date when benefits are paid varies but WTC is either every week or every 4 weeks.
Couples must choose only one account to receive the payments. As a rule, your payments begin from your claim date up to the end of the tax year (5th of April).
Tax credits often go up and go down when your work circumstances or family life change. Common examples includes starting a new job, getting laid off work, or if your partner passes away.
Note: You must report changes affecting tax credits to the Tax Credit Office.
WTC eligibility depends mostly on your age and how many hours of paid work you complete in a week. Income and household circumstances can also affect how much you get. The Working Tax Credits questionnaire helps you check if you qualify.
You must be at least 16 years old to qualify for Working Tax Credits. If you do not have children (or a disability) you must be at least 25 years old to qualify.
The Working Tax Credit table shows how many hours you need to work per week to qualify.
|Your Age and Circumstance||How Many Hours Work Qualifies|
|Age 25 to 59||A minimum of 30 hours|
|Age 60 or over||A minimum of 16 hours|
|Disabled||A minimum of 16 hours|
|Single with one or more children||A minimum of 16 hours|
|Couple with one or more children||As a rule, a minimum of 24 hours between you (one must work at least 16 hours)|
Couples with at least one child can claim if the total you both is work less than 24 hours a week. That is providing one of these situations apply:
To count as work, the working practices for qualification can be carried out:
People who are Self-employed
In some cases you may not be eligible for Working Tax Credit if you are self-employed. Generally, your self-employed work must intend to make profits to qualify for WTC. The business must be commercial, organised, and regular.
Therefore self employed workers may not be eligible for Working Tax Credit unless they:
There may be times when the average hourly profit from self-employment is less than the National Minimum Wage. In this case the Tax Credit Office may request:
The work you carry out must last at least 4 weeks (or expected to) and it must be paid work. Your salary (or expected pay) can include payment in kind. So, farm produce for a farm labourer would qualify, (for example).
Exceptions to this Rule: Paid work does not include money if it gets paid:
Working Tax Credit has no set limit for income. This is because it depends on your family circumstances (and those of your partner). For example, the limit is £18,000 for a couple without children.
Yet, it is £13,100 for a single person without children. In both cases it can be higher if you have children, one of you has a disability, or you pay for approved childcare.
You can request a Working Tax Credit claim form using the online tool or by contacting the Tax Credits Office. The form usually takes 2 weeks to arrive. Informing the Tax Credit Office about a change in your circumstances does not require a claim form.
You will need to prepare certain documents and information when you call including:
You can claim any time of the year after starting a new job. You can usually start claiming 7 days before you start it if you are on benefits.
Processing a new claim can take up to 5 weeks. Remember you will need to renew your claim once every year to keep it running. You should keep records of your income, bills, and payslips to support your claim.
You should also keep benefits, tax credits, childcare and your child’s education records. Keep all documentation you have from the previous 3 years.
You can still get Working Tax Credit for certain periods when you are not working. For example if you:
Your entitlement may still qualify for a certain period of time. You must contact the Tax Credit Office if you do not make a return to work at the end of the leave period.
|Your Circumstance||The Period You Get Tax Credits|
|You lose or leave your job||For 4 weeks|
|You are on Maternity Leave||For the first 39 weeks of your leave|
|You are on Adoption Leave||For the first 39 weeks of your leave|
|You are on Paternity Leave||For the period of your ordinary paternity leave|
|You are on Additional Paternity Leave||Up to the equivalent 39th week of your partner's leave|
|You are off sick (Statutory Sick Pay)||For the first 28 weeks|
|You are On Strike||For the first 10 days|
|You get laid off work||For 4 weeks after you get laid off or the lay off becomes indefinite|
The qualifying rules state you must have:
Note: You may still qualify if you were self employed. That is only if you would have got Statutory Sick Pay or an equivalent benefit had you been employed.
Working Tax Credits Eligibility Criteria and Entitlement in United Kingdom