Benefits for Students in Scotland Handbook 2023/24Part 1: Benefits and tax credits Chapter 11: Child tax credit
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Chapter 11: Child tax credit
Basic facts
    •Child tax credit is paid to families with children.
    •You cannot make a new claim for tax credits.
    •Both part-time and full-time students with children are eligible.
    •The amount you get depends on your income, but most student support is ignored in the assessment.
1. What is child tax credit
Child tax credit (CTC) is a payment made to people with children. It is administered by HMRC and paid whether you are working or not working. Full-time and part-time students with children are eligible. You get a higher amount if you have a child with a disability. The amount of CTC depends on your income in the tax year.
Note: you cannot make a new claim for CTC, because it is in the process of being replaced by universal credit (UC). If you already get CTC, you can add working tax credit to your award and vice versa. If you already get CTC, the government plans to transfer you to UC by the end of 2025.
2. Who is eligible
As new claims cannot be made, students getting child tax credit (CTC) will be those who were already on CTC (and/or working tax credit (WTC)) before starting the course. If you cannot claim CTC, then you may be able to get universal credit (UC) instead (see Chapter 10).
You are eligible for CTC if you meet all the following conditions.1Regs 3-5 CTC Regs
    •You are aged 16 or over.
    •You have a dependent child. You can get CTC for a child until 1 September after their 16th birthday. If they stay on at school, in other full-time, non-advanced education or are on approved training (defined as ‘No One Left Behind’), you can get CTC for them until their 19th, or sometimes 20th, birthday.2Reg 5 CTC Regs This includes during gaps between one course ending and another starting, provided the young person starts the next course. You can only continue to get CTC for a 19 year old on a course or training which they were accepted on, enrolled on, or started before they reached 19 until they leave the course or turn 20, whichever is earlier. You may be able to continue to get CTC for a young person under age 18 for 20 weeks after they leave non-advanced education if they notify HMRC within three months that they have registered for work or training with Skills Development Scotland. If your child lives with someone else part of the time, you should decide between you who has main responsibility, otherwise HMRC decides who gets CTC.
    •You are ‘present and ordinarily resident’ in Britain, are not a ‘person subject to immigration control’ and have a ‘right to reside’. You must normally have been living in the UK for three months before you claim. These terms are explained in CPAG’s Welfare Benefits and Tax Credits Handbook. Overseas students can get further advice from UKCISA (see Appendix 2).
    •Your income is not too high (see Chapter 17).
There are no special rules for students. Both part-time and full-time students are eligible.
 
1     Regs 3-5 CTC Regs »
2     Reg 5 CTC Regs »
Your parent gets child tax credit for you
If you live with your parent(s), they cannot get CTC for you if you are in higher education. They can continue to get CTC for you until your 19th, or sometimes 20th, birthday if you are in full-time, non-advanced education (see above). The course must be one recognised by the Scottish government and be more than 12 hours a week, on average, in term time. The course hours include tuition, supervised study, exams, practical work and any exercise or project in the curriculum. Do not count meal breaks or unsupervised study. You count as full time between courses if you are enrolled on another non-advanced course.
Your parent(s) cannot get CTC for you if you get UC, income support, income-based jobseeker’s allowance, employment and support allowance, CTC or WTC in your own right.
If you live with a partner, or are married or in a civil partnership, your parent(s) can only get CTC for you if your partner is also a young person in full-time, non-advanced education or approved training.
In some circumstances, special rules apply – eg, if you are being looked after by a local authority or are in prison or a young offenders’ institution.
3. Amount of child tax credit
The amount of child tax credit (CTC) you get if you are not working and eligible for working tax credit (WTC) depends on your family circumstances (your ‘maximum CTC’) and how much income you have. If you are eligible for WTC (see Chapter 12), you claim both tax credits together and the amount is worked out together. Tax credits are calculated according to a maximum annual amount that you could receive in the tax year (6 April - 5 April). However, often an annual award is worked out by adding together amounts calculated over separate periods within the year because, for example, you start a new claim or your circumstances change – eg, you have another child, you cease to be a member of a couple or you start work or increase your hours. What follows, therefore, is a simplification of what is often a very complicated calculation and assumes you are claiming CTC (but not WTC) for a full tax year and have no changes in your circumstances during that year. See CPAG’s Welfare Benefits and Tax Credits Handbook for the detailed rules.
HMRC has a tax credits calculator at gov.uk/tax-credits-calculator, where you can check how much CTC you are likely to get.
Step one: work out your maximum child tax credit
The maximum CTC you can get is made up of:
    •child element of £3,455 a year for each child. Note: you cannot get a child element for a child born on or after 6 April 2017 if you are already claiming for two or more children. There are exceptions (see CPAG’s Welfare Benefits and Tax Credits Handbook for these); plus
    •family element of £545 a year. You only get this if your claim includes a child born before 6 April 2017; plus
    •disabled child element of £4,170 a year for each child who gets disability living allowance (DLA), child disability payment (CDP), personal independence payment (PIP), adult disability payment (ADP) or is certified as severely sight impaired or blind; plus
    •severely disabled child element of £1,680 a year for each child who gets the highest rate care component of DLA/ADP/CDP or the enhanced rate daily living component of PIP.
These are the maximum amounts for the tax year April 2024 to April 2025. You get less than the maximum if your income is above a set threshold.
Example
Mairi has two children: Daisy, aged six, and Meena, aged nine. Meena has asthma and gets the lowest rate care component of DLA. Mairi’s maximum CTC for the tax year April 2023 to April 2024 is:
Element
£
Two child elements
3,235
3,235
Family element
545
Disabled child element
3,905
Total maximum CTC
10,920
Whether she gets maximum CTC or a reduced amount depends on her income.
If your circumstances change so that you should gain or lose an element, tell HMRC so your award can be adjusted. If you should gain an element (eg, you have a baby), you must tell HMRC within one month, otherwise you do not get the increase fully backdated. The exception to this is that the disabled child element and the severely disabled child elements can be fully backdated if you notify HMRC within one month of the DLA/CDP or PIP/ADP being awarded.
Other changes must be notified within one month – eg, if you stop being part of a couple. For details, see CPAG’s Welfare Benefits and Tax Credits Handbook.
Step two: getting a means-tested benefit
You automatically get maximum CTC if you are getting income support (IS), income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA) or pension credit (PC).
Step three: not getting a means-tested benefit
If you do not get IS, income-based JSA, income-related ESA or PC, you must compare your income with a set threshold. The income threshold is £19,995, unless you are working and eligible for WTC. If your income is the same as or below this, you get maximum CTC. If your income is above this threshold, you get a reduced amount. If you or your partner are working and you are eligible for WTC, the income threshold is £7,955 instead of £19,995 (and Step one includes WTC elements).
Step four: work out your income
How your student income is calculated for tax credits is covered in Chapter 17. A CTC award for a tax year is usually based on your income in the previous tax year. However, if you expect your income over the current tax year to be more than £2,500 lower or higher than the previous year, tell HMRC and it reassesses your tax credits. Your award is then based on the current year’s income plus £2,500 if it is more than £2,500 lower than in the previous year, or based on the current year’s income minus £2,500 if it is more than £2,500 higher than the previous year’s award.
Step five: calculate your child tax credit
If your income is less than or the same as the threshold, you get maximum CTC. If your income is higher than the threshold, work out 41 per cent of the difference. Your CTC is the amount worked out at Step one minus 41 per cent of the difference between your income and the threshold.
Note: this simplified calculation gives an approximate amount of CTC. Amounts are actually calculated using daily rates. See CPAG’s Welfare Benefits and Tax Credits Handbook for more details.
4. Awards of child tax credit
Tax credit awards are based on your income as it was in the previous tax year. Bear in mind that HMRC requires your income for a tax year, April to April, even though your student award may run from September.
Contacting HM Revenue and Customs
You can report changes of circumstances or make enquiries to the Tax Credit Helpline on 0345 300 3900 (Relay UK: 18001 then 0345 300 3900) between 8am and 6pm, Monday to Friday. You can also report a change online at gov.uk/changes-affect-tax-credits.
Your award runs until the end of the tax year, at which point you are sent a renewal form. Your award can change or end during the year. Tell HMRC about changes in your circumstances. You should also tell HMRC if you expect your income that counts for tax credits to decrease by more than £2,500 in the current tax year, or if you expect it to increase by more than £2,500.
Tax credits are paid directly into a bank account.
5. Challenging a decision
If you think a decision about your child tax credit is wrong, you can ask HMRC to look at it again. This process is known as a ‘mandatory reconsideration’. Provided you ask within the time limit (usually 30 days), HMRC notifies you of the decision in a ‘mandatory reconsideration notice’. If you are still not happy when you get this notice, you can appeal to the independent First-tier Tribunal. If it was not possible to ask HMRC to reconsider the decision within 30 days, you can ask for a late review (within 13 months), explaining why it is late. You can also ask HMRC to look at a decision again at any time if certain grounds are met – eg, if there has been an official error.
If you want to complain about the way your claim has been dealt with, write to the Tax Credit Office, HM Revenue and Customs, BX9 1ER.
If you have been overpaid, the leaflet COP26, What Happens if We’ve Paid You Too Much Tax Credits, explains when the overpayment can be written off and what you need to do. HMRC sets out what you are expected to do to ensure your claim is correct and what you can expect of HMRC. If you have met all your responsibilities and HMRC has failed to meet one of its own, the overpayment should not be recovered. This leaflet also explains when you can ask to repay an amount owed over a longer period. If an overpayment is challenged, it should not be recovered until the dispute is resolved. If you want to dispute recovery of an overpayment, HMRC expects you to do so within three months.
6. Tax credits and benefits
Means-tested benefits
Child tax credit (CTC) is not taken into account as income for income support, income-based jobseeker’s allowance or income-related employment and support allowance, although working tax credit (WTC) is.
Tax credits are taken into account as income for housing benefit. If a tax credit overpayment from a previous year is being deducted, the amount of the tax credit award less the deduction is taken into account. If you have been overpaid in the same year as the award and the tax credit award is consequently reduced, the lower amount of the award still to be paid to you is taken into account.
Arrears of tax credits are treated as capital for means-tested benefits and disregarded for 52 weeks.
CTC is taken into account when calculating whether the benefit cap applies (see here). If you or your partner get WTC, the benefit cap does not apply.
Child benefit
Child benefit is paid in addition to tax credits. It is ignored as income in the tax credit assessment.
Passported benefits
Getting CTC or WTC may entitle you to other benefits. You may be able to get the following.
    •Free school lunches from the local authority. Your income for tax credit purposes must be no more than £18,725 a year. You must get CTC but not be eligible for WTC, unless your income for tax credit purposes is no more than £9,552, or you are getting the four-week run-on of WTC because you have reduced your hours or stopped work.1s53 Education (Scotland Act) 1980, as amended (most recently by SI 2023 No.37); The Education (School Lunches) (Scotland) Regulations 2009 No.178
    •Health benefits, such as free dental treatment and vouchers for glasses. Your income for tax credit purposes must be no more than £15,276 and you must be getting CTC or WTC with a disability element. See Chapter 5 for other ways to qualify for health benefits.
    •Best Start grants and funeral support payments. You qualify if you get CTC or WTC (or both). See cpag.org.uk/scottish-benefits for more information.
    •Best Start foods. If you have a child aged under three, or you are pregnant, and get CTC, you are eligible for a Best Start foods payment card which can be used to buy certain foods. You are also eligible if you get WTC.2Reg 10 The Welfare Foods (Best Start Foods) (Scotland) Regulations 2019 No.193, as amended (most recently by SI 2023 No.111)
    •Scottish child payment.
    •You may also be eligible for a school clothing grant - see mygov.scot/clothing-grants.
 
1     s53 Education (Scotland Act) 1980, as amended (most recently by SI 2023 No.37); The Education (School Lunches) (Scotland) Regulations 2009 No.178 »
2     Reg 10 The Welfare Foods (Best Start Foods) (Scotland) Regulations 2019 No.193, as amended (most recently by SI 2023 No.111) »