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Last updated:
18/06/2020

How will Universal Credit affect Child Tax Credits?

Universal Credit is replacing Child Tax Credits. We explain what this means for you, how Universal Credit will affect your Child Tax Credits, and what the differences are between the two benefits.

Your current situation will determine how Universal Credit will affect your Child Tax Credits. If you experience a significant change in circumstances - such as starting work, moving in with a partner, or having another child - you will be asked to move from child tax credits to Universal Credit.

Situation Outcome
You have your first child and don’t currently claim Working Tax Credits. You will need to claim Universal Credit.
You have your first child and currently claim Working Tax Credits. You can claim Child Tax Credits.

You are claiming Income Support and:

  • You’re a single parent your youngest child has turned five.
  • You’re not a full-time carer for someone who’s sick or disabled.
You will need to claim Universal Credit.

If you have a significant change in circumstances such as:

  • Starting work.
  • Moving in with a partner.
You will need to claim Universal Credit.

How will moving from Child Tax Credit to Universal Credit affect me financially

When you move from Child Tax Credit to Universal Credit, you could receive more or less than you are currently receiving in Child Tax Credit and other benefits.

If you have a child, you can claim Universal Credit until they reach 19 if they are in full time approved education or training. This doesn’t apply if your child is at University.

You will receive an additional amount for a second child, and for any other child born before 6th April 2017. You won't receive any extra money for a third child born on or after this date - unless one of the following exemption applies:

  • You have a multiple birth - if you have other children born before 6th April 2017, you won't get a payment for the first child in a multiple birth.
  • Your third or later child is disabled - to qualify they must be receiving DLA or PIP.
  • You have a child from rape or a controlling relationship.
  • You're responsible for a child under 16 who has a child, and they both live with you.
  • You've adopted a child from the UK.
  • You're caring for someone else's child.

Your monthly Universal Credit payment will include the following elements and additions, which will replace your Child Tax Credits.

  • Child element: helps with the cost of supporting a child.
  • Disabled child addition: helps with the extra costs of bringing up a disabled child and will be paid at either a lower or higher rate depending on the needs of your child.
  • Childcare costs element: If you are working, you can claim up to 85% (capped limit of £646.35 for one child and £1,108.04 for two or more children) of your childcare costs as part of your monthly Universal Credit payment.

To receive your monthly childcare costs element, you must show evidence to the Department for Work and Pensions (DWP) of how much childcare you have paid.

Note

The First Child Premium available with Child Tax Credit will no longer exist with Universal Credit.

The table below shows the Universal Credit child element rates:

Circumstances Chile element rate
Your oldest child is born before 6th April 2017 £281.25
Your oldest child is born after 6th April 2017 £235.83
Your second child, and each eligible child after that £235.83
If your child is disabled £128.25
If your child is severely disabled £400.29

What are the different rules to receive Universal Credit compared to Child Tax Credits?

Compared to Child Tax Credit, there are different rules you must adhere to when claiming Universal Credit. These differ as your child gets older:

Child's age What is required of you
Under one You will not be expected to work.
Between one and two You will be asked to attend interviews with a work coach to discuss plans for a return to work in the future.
Between three and four You will be expected to work a maximum of 16 hours a week - or use this time to apply for jobs - this might include training or interviews.
Between five and 12 You will be expected to work or apply for jobs that suit your needs - for example, paid work during school hours.
13 or above You will be expected to work full-time or apply for full-time jobs.

There are different rules if you are not fit for work.

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