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Wednesday, 3 October 2023

Money, tax and benefits

Money, tax and benefits

What counts as work for Working Tax Credit?

Working Tax Credit is based on the hours you work and get paid for, or expect to be paid for. It doesn't matter if you're employed or self-employed, but unpaid work doesn't count as work when claiming tax credits. Check if your work can help you qualify for Working Tax Credit.

What hours do you need to work?

You don't have children

If you're not responsible for children, you need to work the following hours to get Working Tax Credit:

  • if you're aged 25 or over, you need to do paid work of at least 30 hours a week
  • if you have a disability and are aged 16 or over, you need to do paid work of at least 16 hours a week
  • if you're aged 60 or over, you need to do paid work of at least 16 hours a week

You have children

If you're responsible for children you need to be aged at least 16, and work the following hours to get Working Tax Credit:

  • if you're single, you need to do paid work of at least 16 hours a week
  • if you're in a couple, your joint paid working hours need to be at least 24 a week, with one of you working at least 16 hours a week

So if you're a couple and only one of you is working, that person will need to work at least 24 hours a week.

If your joint working hours are less than 24 a week, you can still get Working Tax Credit if one of the following applies:

  • one of you is aged 60 or over and working at least 16 hours a week
  • one of you is disabled and working at least 16 hours a week
  • one of you works at least 16 hours a week and the other is entitled to Carer's Allowance - even if they don't get any payments because they receive other benefits instead
  • one of you works at least 16 hours a week, and the other is 'incapacitated', an in-patient in hospital, or in prison (serving a custodial sentence, or remanded in custody awaiting trial or sentence)

If you used to get the '50-plus element'

The extra '50-plus element' stopped from 6 April 2012, for those people aged 50 or over returning to work after being on benefits. So if you're aged 50 or over and are now going back to work, you'll need to work the relevant number of hours as explained above.

So, for example, if you don’t have children you'll normally need to work at least 30 hours a week to get Working Tax Credit.

What counts as paid work?

If you're an employee, paid work means:

  • the work you do for your employer in return for payment (or where you would expect to be paid) such as wages
  • any ‘payment in kind’ (for example groceries for a person who works as a shop assistant, or farm produce for a farm labourer)

If you're self-employed, paid work means any work you do for payment (or would expect to be paid) or profit.

To claim Working Tax Credit, you should expect your paid work to continue for at least four weeks.

What doesn't count as paid work?

If any of the following apply to you, the work won’t count for Working Tax Credit purposes:

  • you are a student and do work as part of studying for a degree or other qualification (any grant or loan you get is for maintenance and is not paid in return for work done on the course)
  • you are a student nurse and you get an NHS Bursary and other grants or loans for work done on the course
  • you work for a charity or a voluntary organisation where you get no pay or you only get expenses
  • you work for a local authority, health authority charitable or voluntary organisation caring for someone who’s not a member of your household - and where the only payment you receive is covered by the Rent a Room scheme
  • you are on strike for more than ten days in a row
  • you work in a scheme where you get a training allowance, rather than pay - unless the allowance is taxable
  • you take part in the Intensive Activity Period or Preparation for Employment Programme - unless the payment received is taxable
  • you take part in an activity where a sports award has been made and no other payments have been made or are expected to be made
  • you take part in an Employment Zone programme where no other payments have been made (except for training premiums or discretionary payments, such as fees, grants, loans or arrears of expenses paid as a lump sum)
  • you are working - either inside or outside prison - while you're serving a custodial sentence, or remanded in custody awaiting trial or sentence

When and how to claim

You need to be in paid work at the time you make your claim, or starting paid work within seven days of making your claim. You will only get Working Tax Credit if you actually start this paid work.

If you're already getting Child Tax Credit you should call the Tax Credit Helpline to claim Working Tax Credit.

If you don’t already get tax credits you have to fill in a claim form to claim. You can only get a claim pack from the Tax Credit Helpline. You can't claim online.

If you're temporarily absent from work

You may still be treated as working and still able to get Working Tax Credit when you're sick or on maternity, paternity or adoption leave. But you'll need to have usually worked a certain number of hours immediately before you went on leave.

There are also other situations where you have a temporary gap in your work, but may still be treated as working. For example, you might not be in work for a short while because you have a gap before starting a new job, or you've been laid off.

If you leave paid work - or change your hours

You may not be able to get Working Tax Credit if you:

  • leave work or you start to work less than the minimum number of hours a week for your circumstances
  • leave your job and receive pay instead of notice because you won't be counted as being in work for Working Tax Credit purposes during that period - but if you get another job during that time, you may still qualify based on your new job

If you’re already getting Working Tax Credit, your payments may carry on for a short while. Tell the Tax Credit Office straight away if your work circumstances change. This is so that they can make sure you don't get too much or too little in the way of tax credits.

More useful links

Provided by HM Revenue and Customs

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