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Wednesday, 3 October 2023

How tax credits affect other benefits

Getting tax credits won't normally affect any other benefits you get. But there are some benefits that take tax credits into account when the money you'll get is being worked out. It’s worth checking how tax credits might affect other benefits before you make your claim.

Other benefits that may be affected

Some benefits you might get are 'means tested'. This means that the money you get depends on:

  • how much you've got coming in - your income
  • how much you’ve got in your savings

When your benefit is worked out, any tax credits that you (and your partner if you have one) get might be counted as income. This could be Working Tax Credit, Child Tax Credit or both.

The benefits that may count tax credits as part of your income are:

  • Council Tax Benefit
  • Housing Benefit
  • Income Support
  • income-based Jobseeker's Allowance
  • income-related Employment and Support Allowance
  • Pension Credit

The more money you've got coming in, the lower these benefit payments will be. Sometimes they may go down to nothing - 'nil'.

If you're not getting tax credits at the moment

If you get any of the benefits listed above, they may go down to nil if you claim - and get - tax credits. Whether it's Working Tax Credit, Child Tax Credit, or both, it could affect your other benefits.

Even if your benefit payments do go down to nil, you can often get at least as much money overall as you were getting before. And as long as you qualify for tax credits, you may still get other help, such as free school meals or free prescriptions.

Before you claim tax credits, it's a good idea to ask the office that pays you the other benefits how your payments might be affected.

If you're already getting tax credits

If you claim any of the benefits listed above, let the benefit office know that you're getting tax credits when you make your claim.

The benefit office need to know how much tax credits you're getting so they can work out what your benefit payment should be.

Any new benefits you claim won't usually include money for your children. This may mean that you get more Child Tax Credit. The exceptions are Housing Benefit and Council Tax Benefit which always include an allowance for children.

The benefit office will help you tell the Tax Credit Office that you have claimed benefit.

Changes to your tax credits that may affect other benefits

If you're getting any of the benefits listed above and your tax credits go up, down or stop, tell the benefit office that pays you. Tell them as quickly as possible.

The benefit office can then make sure they're paying you the right amount of benefit as quickly as possible.

If you don't tell them straightaway, they may pay you too much, meaning you'll have to pay it back. Or if they don't pay you enough you may have to wait before you get what's due to you.

Tax credits effect on non-UK benefits

If you or your partner get benefits from another country, your benefit payments may be affected if you claim tax credits in the UK. You'll also need to tell the Tax Credit Office if the amount of your non-UK benefit changes. You can do this by calling the Tax Credit Helpline.

Contact details for other benefits

There are different benefit offices to contact, depending on where you live and which benefits you get.

If you're in England, Wales or Scotland

The offices to contact are:

  • for Income Support, Jobseeker’s Allowance and Employment and Support Allowance - Jobcentre Plus
  • for Housing Benefit and Council Tax Benefit - your local council
  • for Pension Credit - the Pension Service

If you're in Northern Ireland

The offices to contact are:

  • for Income Support, Jobseeker’s Allowance and Employment and Support Allowance - your local Social Security or Jobs & Benefits Office
  • for Housing Benefit for tenants - the Northern Ireland Housing Executive
  • for Housing Benefit for owner occupiers - Land and Property Services
  • for Pension Credit - the Pension Service

Provided by HM Revenue and Customs

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