Working Tax Credits
What are Working Tax Credits?
You may be able to claim Working Tax Credits (WTC) to top up your wages if you are in paid work but have a low income. Her Majesty’s Revenue & Customs (HMRC) manages WTC; use their calculator to calculate your tax credits.
Can I claim WTC?
You can claim WTC if you are:
- Aged 25 or over and work at least 30 hours per week,
- On a low income, and
- Not subject to immigration control.
Or if you are:
- Above the age of 60 and usually working at least 16 hours a week, or
- Between 16 – 24 years old and you or your partner are working for 16 or more hours per week, or
- A single parent responsible for a child , or
- A couple, one or both of you are responsible for a child and one of you works at least 16 hours a week and you work at least 24 hours between you, or
- A couple, one or both of you are responsible for a child and one of you works at least 16 hours per week because the other person is in hospital, in prison, or entitled to carer’s allowance, or
- Incapacitated and working 16 hours or more a week. you usually count as being incapacitated if you get certain benefits. The list is very long and we have not detailed all of them here, the most common incapacity benefits are:
- Severe Disability Allowance,
- Disability Living Allowance,
- Personal Independence Payment, or
- Contribution based Employment and Support Allowance – but you must have been able to claim for at least 28 weeks; or
- If you have been assessed as meeting the criteria for having limited capacity for work due to illness or disability.
If you have limited capacity for work due to illness or disability, you should also qualify for the disability element as long as you are working on average over 16 hours a week.
To qualify for the disabled workers element you must:
- Normally work at least 16 hours per week; and
- Be able to show that your disability puts you at a disadvantage of finding work, by being assessed as meeting the criteria for having limited capacity for work; or
- Pass the qualifying benefit test. You pass this test if you are receiving a disability benefit such as:
- Disability Living Allowance (DLA),
- Personal Independence Payment (PIP),
- Armed Forces Independence Payment (AFIP), or
- Attendance Allowance (AA).
You also pass this test if at any time in the last 26 weeks you were getting Employment and Support Allowance (ESA) or National Insurance credits due to limited capacity for work.
There are other routes to receiving the disabled workers element without the requirement of satisfying the qualifying benefit test. These can be quite complex so it is best to seek advice if you are returning to work and have a disability which is likely to last at least six months.
You may find it more difficult to find work if you have a mental illness.
- Be receiving treatment or be under the supervision of a mental health professional,
- Get confused or forgetful a lot, or
- Have problems making friends or relationships.
You may be able to claim more money if you are employed and this would happen if your earnings drop because of reduced hours, or you have made a Statutory Sick Pay or Employment and Support Allowance claim.
You must tell the HMRC about a change in your income or working hours so they can change the amount that you get.
There is currently a freeze on benefit and some tax credit amounts for four years. Income Support, Jobseekers Allowance, Employment and Support Allowance, Housing Benefit, Universal Credit and most elements of Working Tax Credit have been frozen. You will not be affected by the freeze if you get the disabled and severely disabled elements of working tax credit.
Will my WTC stop?
You have to reapply for WTC each year and you can't renew until you have received your renewal pack - HMRC will send you a renewal pack or you can apply online.
You may stop getting WTC if your circumstances change and this will happen if you:
- Claim as a single person but you become part of couple,
- Claim as a couple but you become single, or
- Don't work enough hours to qualify.
- How do I check what I’m entitled to?
- Universal Credit
- Employment and Support Allowance
- Jobseeker’s Allowance
- Income Support
- Incapacity Benefit
- Severe Disablement Allowance
- Statutory Sick Pay
- Working Tax Credits
- Personal Independence Payment
- Housing Benefit
- Support for Mortgage Interest
- Rates: Exemptions and Support to pay
- Social Fund
- Next steps