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The income limit for Child Tax Credit has gone down

Child Tax Credit payments depend on your circumstances and income.

Before April 2012, you could usually get some Child Tax Credit, as long as your income was not over the limit of £41,300. From 6 April 2023 this limit is lower for most people.

The income limit for you now depends on your own individual circumstances. But as a very rough guide, you might not get Child Tax Credit from 6 April 2023 if:

• you have one child, and your annual income is more than around £26,000
• you have two children, and your annual income is more than around £32,200

But it's important to know that:

• this is a rough guide
• the income limit for you may be different, as it depends on your own circumstances

You could still qualify if your income is above these amounts. For example, if you pay for registered or approved childcare, have more than one or two children, are disabled or your child has a disability.

You can find out how your own payments are affected by checking your award notice for 6 April 2023 to 5 April 2012.

You can also use an online calculator to work out roughly the amount of tax credits you could get between today's date and 5 April 2013.

• Tax credits Budget changes - examples

Couples with children - new working hours rules for Working Tax Credit

Before April 2012, couples responsible for children, with one partner working at least 16 hours a week, could get Working Tax Credit.

From 6 April 2012, the rules for couples with children have changed. Single people who are responsible for children (for example single parents) are not affected by the new rules.

If you're a couple with children, your joint working hours now usually need to be at least 24 a week to qualify.

This means:

• if you both work, your joint weekly hours must be at least 24, with one of you working at least 16 hours a week
• if only one of you works, that person must be working at least 24 hours a week

If neither of these apply, your Working Tax Credit will have stopped from 6 April 2012. But there are some exceptions to the new rules, and these are listed just below.

If any of the exceptions apply to you, call the Tax Credit Helpline straight away - you could still get Working Tax Credit.

• Contact details for the Tax Credit Helpline

• Tax credits Budget changes - examples

If one of you is aged 60 or over

You'll qualify for Working Tax Credit as long as the person who's 60 or over works at least 16 hours a week.

If one of you gets extra Working Tax Credit because of a disability

You'll qualify for Working Tax Credit if both of the following apply to the disabled person:

• they work at least 16 hours a week
• they qualify for the 'disability element' of Working Tax Credit

If one of you is ill or disabled, an inpatient in hospital or in prison

You'll qualify for Working Tax Credit if one of you works 16 hours a week or more, and the other is:

• 'incapacitated' - this means they're ill or disabled and getting certain benefits, or in certain circumstances National Insurance credits
• an inpatient in hospital
• in prison - serving a custodial sentence, or remanded in custody awaiting trial or sentence

• 'Incapacitated': what this means for Working Tax Credit

If one of you is entitled to Carer's Allowance

You'll qualify for Working Tax Credit if one of you works 16 hours a week or more, and the other is entitled to Carer's Allowance. This means either of the following:

• they get paid Carer’s Allowance
• they qualify for Carer’s Allowance, but don’t actually get any payments as they receive other benefits instead

If this applies to you, you could now also get help with the cost of registered or approved childcare. Follow the link below to find out more.

• Help with childcare costs - do you qualify for extra tax credits?

Your income goes down - change in how it affects your payments

Before April 2012, if your annual income for the current tax year went down, you could often get extra tax credits for the current year. A tax year runs from 6 April one year to 5 April the next.

From 6 April 2012, if your income goes down it might not affect your payments until the following year. But this depends on how much your income has gone down by.

You should always tell the Tax Credit Office your new lower income, to help make sure you get what you’re entitled to.

If your income goes down in the current tax year by £2,500 or less

Your payments won’t change for the current tax year - if all your other circumstances stay the same. But the Tax Credit Office will use your new income figure to work out what to pay you for next year.

• Tax credits Budget changes - examples

If your income goes down in the current tax year by more than £2,500

The Tax Credit Office will re-work your tax credits. But they will ignore the first £2,500 of the reduction. They will take the full amount of the reduction into account when they work out what to pay you for next year.

• Tax credits Budget changes - examples

Changes to how far payments can be backdated

Making a new claim for tax credits

Before April 2012, the Tax Credit Office could pay tax credits for up to three months before the date they got your claim form. This is known as 'backdating' your claim.

From 6 April 2012, this period reduced to one month. Now, when the Tax Credit Office receives your claim, they'll only be able to backdate it by up to one month.

This change means you could lose money if you delay claiming. For example if you have a baby on 1 June, but your claim's not received until 1 August, your payments will only start from 1 July. You'll lose out on a month's payment.

Reporting changes

Before April 2012, if a change meant your payments went up, you would usually get the higher amount backdated for up to three months.

From 6 April 2012, this period reduced to one month. Now, if you report a change that means your payments go up, the higher amount will only be backdated by up to one month.

To make sure you get your higher payments backdated to the earliest possible date, you should report all changes within one month.

• Tax credits Budget changes - examples

If you got the '50-plus element' - this has ended

If you were getting the extra amount of Working Tax Credit, called the '50-plus element', this stopped from 6 April 2012.

This means your payments could have gone down from 6 April 2012.

This change also means your Working Tax Credit could have stopped altogether, unless you're working a certain number of hours. This is explained in the next section.

• Tax credits Budget changes - examples

If you're aged 50 or over - working hours changes

Before April 2012, if you got the '50-plus element', you only needed to work at least 16 hours a week to qualify for Working Tax Credit.

Now the 50-plus element has stopped, from 6 April 2023 if you're not working a certain number of hours your payments may have stopped altogether. If you increase the hours you work, you could be entitled to Working Tax Credit again.

You now need to be working the following hours to qualify for Working Tax Credit.

If you are not responsible for children

You - or your partner if you've got one - need to work at least:

• 30 hours a week
• 16 hours a week - if you're aged 60 or over, or you're entitled to the 'disability element' of Working Tax Credit

If you're responsible for children

You'll qualify for Working Tax Credit if either of the following applies:

• you're single and working at least 16 hours a week
• you're in a couple, and meet the new hours rules for couples - see the section above

Tax credits rates

There have been changes to some of the tax credits rates (or 'elements'). One of these is that the maximum amount of the child element of Child Tax Credit has gone up from £2,555 to £2,690.

Follow the link below to find out what the new tax credits rates are.

• Rates for tax credits Opens new window

More useful links

• How your tax credits entitlement is worked out

• Checking your tax credits award notice

• Tax credits: changes you need to report and when

• Changes in income and tax credits

• How to claim tax credits

Useful contacts

• Tax Credit Helpline and Tax Credit Office