Tax Credits

By The Maternity Alliance

Who can claim and what for - The Maternity Alliance takes you through the benefits maze

Child Tax Credit (CTC)
CTC is financial support for children paid to the main carer. Nine out of ten families with children will be eligible for this tax credit. It is paid to families both in and out of work. Extra CTC is paid to families with a child under the age of one.

Working Tax Credit (WTC)
WTC is financial support for lower paid workers paid through your wage packet. You do not have to have children to qualify for WTC,

  • if you do not have children you must be aged at least 25 and work at least 30 hours a week
  • if you do have children you can claim from the age of 16, and you must work at least 16 hours a week to qualify.

WTC can help with the costs of registered childcare. You will be 'treated as working' during ordinary maternity leave, as long as you were working at least 16 hours a week on average before you started your leave.

How much is it?
It depends what your income is, how many children you have, how old they are, and whether you pay for registered childcare. If your gross income is less than £97 a week you get the maximum amount.

Applications are based on income for the previous tax year but can be revised if your income falls during the year of the award, for example, because you go on maternity leave.

Any Child Benefit, Maternity Allowance or the first £100 a week of Statutory Maternity Pay you are receiving is ignored in working out your family income. Any child maintenance you receive is also ignored, so if you apply for Tax Credits you do not have to fill in forms for the Child Support Agency as you are asked to do with some benefits.

What if my circumstances change?
Awards are made for a year at a time, but will respond to certain changes in circumstance during that time. You must notify the Inland Revenue within three months if your household circumstances change, or your childcare costs are reduced or stop. Any increase or reduction in entitlement will be backdated to the date of the change. Check your award notice for income changes that could affect your award. Report any rise in annual income of more than £25,000 to avoid an overpayment at the end of the year.

Help with childcare costs
Who gets it?
You may be able to get extra WTC to help with the cost of childcare if:

  • you are a single parent working, or treated as working, at least 16 hours a week; you live in a couple where each of you works, or is treated as working, at least 16 hours a week; or one of you is incapacitated, and
  • you pay for registered childcare (e.g. a childminder, nursery, playscheme or out-of-school club)

If you qualify you can get extra WTC which will pay for up to 80 per cent of your childcare costs. The maximum cost taken into account will be £175 for one child or #300 for two or more children.

How to apply
Contact the Tax Credits helpline on 0845 300 3900 for more information or to ask for an application form, or log on to the Inland Revenue website at www.hmrc.gov.uk/taxcredits

Anything else?
If you get Child Tax Credit of at lease the family element of £10.45 per week (£20.90 if you have a baby under one) you may also be able to claim the £500 Sure Start Maternity Grant. To apply for the grant, you need to complete an SF100 application form and send it into your JobCentre Plus within three months of the birth of your baby. If you are not sure if you qualify, apply anyway.

For more information about benefits and tax credits see the Maternity Alliance website.

For details of publications, leaflets and information packs contact The Maternity Alliance office:

2-6 Northburgh Street
London EC1V 0AY
Information line: 020 7490 7638