Working tax credit

WTC helps supplement low wages. It can only be paid to those who are working (employed or self-employed) for at least 16 hours a week or, in some cases, 24 or 30 hours a week. You get a higher amount if you work 30 hours or more or have a disability. If you get CTC, you can also get childcare costs paid with WTC. The amount of WTC you get depends on your income in the tax year.

Who can get working tax credit

If you are not in the UC system, you qualify for WTC if:1ss3(3) and (7), 10 and 42 TCA 2002; regs 4-8 WTC(EMR) Regs; reg 3 TC(R) Regs; reg 3 TC(Imm) Regs

•you are aged at least 16; and
•you (or your partner) are in full-time paid work (see below); and
•your income is low enough; and
•you are present and ordinarily resident in the UK and you are not a ‘person subject to immigration control’. These terms are explained in CPAG’s Welfare Benefits and Tax Credits Handbook.

 

Full-time paid work

You count as being in full-time paid work if:2Reg 4 WTC(EMR) Regs

•you are a single claimant, have a dependent child (see here) and you work for at least 16 hours a week; or
•you are a couple, have a dependent child and your combined working hours are at least 24 a week. If you both work, one must do at least 16 hours. If only one of you works, you must do at least 24 hours. Note: if the non-working partner is incapacitated, a hospital inpatient, in prison or entitled to carer’s allowance (CA), you can qualify if you work at least 16 hours a week. See CPAG’s Welfare Benefits and Tax Credits Handbook for more details; or
•you have a disability that puts you at a disadvantage in getting a job and you work for at least 16 hours a week. For more details, see CPAG’s Welfare Benefits and Tax Credits Handbook; or
•you are aged at least 60 and you work at least 16 hours a week; or
•you are aged at least 25 and you work at least 30 hours a week.

Sometimes you count as being in full-time work even when you are not – eg, while you are getting statutory adoption pay or maternity pay, or, in certain cases, for up to 28 weeks of sickness.

Work can be as an employed or self-employed earner. Fostering and, in certain cases, kinship care can count as self-employed work. See Chapters 7 and 8 for more details.

 

1     ss3(3) and (7), 10 and 42 TCA 2002; regs 4-8 WTC(EMR) Regs; reg 3 TC(R) Regs; reg 3 TC(Imm) Regs »

2     Reg 4 WTC(EMR) Regs »

Amount of working tax credit

The WTC you can get is made up of a basic element of £2,005 a year, plus whichever of the following elements apply:

•lone parent or couple element of £2,060 a year;
•30-hour element of £830 a year if you work at least 30 hours a week. If you have a child, you can add your hours to those of your partner to make up the 30 hours, providing one of you works at least 16 hours a week;
•disabled worker element of £3,240 a year if you qualify for WTC as a disabled worker;
•severe disability element of £1,400 a year if you or your partner get the highest rate of the DLA care component or the enhanced rate of the PIP daily living component;
•childcare element. You may get up to 70 per cent of childcare costs up to a limit of £175 for one child or £300 a week for two or more children for whom you get CTC – ie, a maximum of £122.50 or £210. Childcare must be of a certain type, including a registered childminder, nursery or playscheme, an out-of-hours club or sitter service. You do not get help with childcare at home provided by a relative. Generally, to get the childcare element, you, and your partner if you have one, must be working 16 hours or more a week. If you claim as a couple, you can still be entitled if one of you is working 16 hours or more a week and the other is incapacitated, entitled to CA, in hospital or in prison.

These are the amounts for the tax year April 2021 to April 2022. You get less than the maximum if your income is more than a set threshold.

The income threshold is £6,565. If your income is below this, you get maximum WTC. If your income is above this threshold, you get a reduced amount.

For details of how income is treated and how your WTC award is calculated, see CPAG’s Welfare Benefits and Tax Credits Handbook.

See the relevant chapters of this Handbook for more information on how specific income (eg, fostering allowances and payments from the local authority) is treated.