Tax credits

This information applies to England and Wales.

Tax credits are a means-tested benefit (based on income and savings) to help people with low income. There are 2 types of tax credits:

1. Child Tax Credit, for families to help with the cost of raising children
2. Working Tax Credit, for people in work on a low income

Universal Credit is replacing tax credits. You can only make a new claim if you already get tax credits.

Child Tax Credit

You can only make a new claim for Child Tax Credit if you already get Working Tax Credit.

If you cannot make a new claim, you can apply for Universal Credit instead.

Child Tax Credit is different from Child Benefit and does not affect it.

How much you can get depends on:

• how many children you're responsible for
• when they were born
• if they're disabled

See how much you can get if you're eligible to make a new claim (GOV.UK)

If you're eligible, you can claim until the children are 16, or until they’re 20 if they’re a qualifying young person. 

Use the tax credits calculator to check if you’re eligible (GOV.UK)

When your child is no longer eligible, Child Tax Credit stops. You could look at claiming other benefits like Universal Credit. Your child could also check if they’re eligible for their own benefits.

Disabled element of Child Tax Credit

You can get an extra £3,905 a year for each child who:

• gets Disability Living Allowance (DLA) or Personal Independence Payment (PIP) 
• or is certified blind

Or an extra £5,480 a year for each child if they get:

• the highest rate of the care component of DLA
• or the enhanced rate of the daily living component of PIP

If you’re eligible for both Child Tax Credit and Universal Credit, use a benefits calculator to check which gives you more money before deciding which to claim.

Child Tax Credit and PIP

If your child is awarded PIP, you may be eligible for the disability element of Child Tax Credit. This means you get more money each year. You will need to let the tax office (HMRC) know about your child’s PIP.

If your child gets the enhanced rate of the PIP daily living component, you can get the higher rate of the disability element.

You do not need to have been claiming PIP before you can get the disability element.

Use the Turn2us benefits calculator

Child Tax Credit and ESA

You can no longer make a new claim for income-related Employment and Support Allowance (ESA) or contributory ESA. Universal Credit and New Style ESA have replaced these.

You can get the maximum amount for Child Tax Credit if you get:

• income-related ESA
• or income-related ESA and contributory ESA

New Style ESA and contributory ESA count as income towards your Child Tax Credit. This means you might get less money.

Child Tax Credit and appeals

If you win a PIP or DLA appeal, the disability element can backdate to the start of your qualifying benefit.

You would need to notify the tax office (HMRC) about the decision within 1 month.

Working Tax Credit

You can only make a new claim for Working Tax Credit if you already get Child Tax Credit. If you cannot make a new claim, you can apply for Universal Credit instead.

You must work a certain number of hours each week to be eligible. There’s no set limit for income to be eligible because it depends on your circumstances.

You must work at least 30 hours if you’re:

• aged 25 to 59

Or at least 16 hours if you're:

• disabled
• aged 60 or over
• single with 1 or more children

If you are a couple with 1 or more children, you must work at least 24 hours between you, and 1 of you must work at least 16 hours.

Student loans, National Insurance and pension contributions will affect how much you get.

You can get Working Tax Credit for 39 weeks while you're on maternity leave.

Use the Turn2us benefits calculator

Disabled element of Working Tax Credit

The disabled element of Working Tax Credit is for people who are disadvantaged in getting work because they’re disabled.

See a list of what counts as being disadvantaged in getting work (Turn2us)

If you count as disadvantaged and work at least 16 hours a week, you can get an extra £3,685 a year if you get 1 of the following:

• Personal Independence Payment (PIP)
• Disability Living Allowance (DLA)
• Attendance Allowance

See the full list of qualifying benefits (entitledto)

Working Tax Credit and PIP

If you get Working Tax Credit and you’re awarded PIP, you may be eligible for the disability element. This means you get extra money each year. How much you get depends on your situation.

You might be able to get the severe disability element too. This is an extra £1,595 a year on top of the disability element. You can get this if you get:

• highest rate of the DLA care component
• the enhanced rate of the PIP daily living component
• the highest rate of Attendance Allowance or Armed Forces Independence Payment

You can claim the disability element as soon as you get PIP. You will need to let HMRC know about your PIP.

Working Tax Credit and ESA

You can no longer make a new claim for income-related ESA or contributory ESA. Universal Credit and New Style ESA have replaced these.

You cannot usually get ESA and Working Tax Credit at the same time. This is because you need to work at least 16 hours a week to get Working Tax Credit. But you need to work less than 16 hours a week to get ESA.

If you're on sick leave, your Working Tax Credit can continue for 28 weeks. You can claim ESA during this time.

If you do not go back to work after 28 weeks, your Working Tax Credit would stop.

Working Tax Credit and appeals

If you win a PIP or DLA appeal, the disability element can backdate to the start of your qualifying benefit.

You would need to notify HMRC about the decision within 1 month.

Tax credit overpayments

Sometimes people are paid too much in tax credits. This is called an overpayment. If this happens, HMRC will write to explain why you have been overpaid.

If you need more information, contact the Tax Credits helpline on 0345 300 3900.

HMRC will take money from your tax credits to repay an overpayment. You’ll find information about overpayments on your tax credit statements.

How to repay your tax credits (GOV.UK)

The debt cannot be written off. But you can ask the Tax Credits helpline for lower repayments. You should explain how the repayments are making it harder for you to afford living costs.

Challenging a working or child tax credits decision (Citizens Advice)

If your situation changes

You'll need to tell HMRC about any changes to your family or work life. For example, if:

• your income changes
• your working hours change
• your child leaves education or starts work
• you get a new job
• you finish work
• you are no longer with your partner

Report changes that affect your tax credits (GOV.UK)