Politics
Why has my tax credits gone down?
IF you receive working tax credit, you might have noticed your payments have gone down.
The Government boosted working tax credits by £1,040 to £3,040 from April last year to help struggling families through the Covid crisis.
Here’s all you need to know about what’s happening to your working tax credit payments[/caption]
But this increase was axed when the new tax year started on April 6 earlier this week.
Why has it gone down, and will you lose out? We explain all you need to know.
Why have my tax credits gone down?
The previous 12 months saw working tax credit claimants enjoy an extra £20 boost a week.
But the Government axed this earlier this week in exchange for a £500 one off payment which will be given to claimants later this month.
The Chancellor explained in the Budget last month that working tax credit claimants can’t get a weekly boost because of the way the system works.
Instead, they’ll be given a £500 lump sum on April 23.
Announcing the plans in his Budget last month, Mr Sunak said: “We’ll provide Working Tax Credit claimants with equivalent support for the next six months.
“Because of the way that system works operationally, we’ll need to do so with a one-off payment of £500.”
The £500 payment will match the £20 a week uplift that Universal Credit claimants are getting until the end of September.
Who is eligible for the £500 payment?
If you claim working tax credits, you could get the £500 payment.
Brits will be able to get the cash if they received the following benefits on March 2:
- Working tax credit payments
- Working tax credit and child tax credit payments
Those who get child tax credit payments and are eligible for working tax credit but do not get payments because their income is too high will also be able to get the payment.
How do I get it?
You do not need to apply to get the new payment.
HMRC will text you or send you a letter to confirm if you’re eligible for the payment.
If you’re eligible for the payment, you should automatically be paid by April 23.
You should receive it via the same method that you usually get your tax credits paid.
If the payment doesn’t arrive, you can ask for help via the tax credits helpline on 0345 300 3900.
The Budget documents also confirmed that the government will continue
to treat working tax credit claimants who have been furloughed, or experienced a temporary reduction in their working hours, as working their normal hours.
This allows these claimants to remain eligible for working tax credit rather than losing the benefit because the pandemic has impacted their earnings.
How do I claim working tax credit?
You can no longer apply for working tax credit.
This is because it has been replaced by the Universal Credit system, which you can apply for instead.
How do I apply for Universal Credit?
HERE’S all you need to know about applying for Universal Credit.
You’ll need to apply to the new welfare system via the gov.uk website, starting by setting up an online account.
To make an account, you’ll need an email address and a phone number.
After that, you’ll need to answer a set of questions about your current circumstances, known as your “to do list”.
These include things like when you last received payment for a job, what your household income is and how many people depend on you financially.
If you’ve lost your job, Citizens Advice recommends that you don’t apply until you’ve received your final wages or any final holiday pay.
This is because any money you receive after you’ve applied for Universal Credit will count as income and mean that you’re entitled to less in your first payment.
You will then need to confirm your identity online.
In certain circumstances, you’ll be able to apply over the phone, such as those who don’t have regular access to the internet, are visually impaired, or have a physical condition that stops you from using a computer or smartphone.
To do this, you will need to contact the Universal Credit helpline to ask if you can apply by phone or arrange a home visit.
In this case, someone can call them on your behalf if you can’t do it yourself.
Lots of people have been switched from tax credits to the newer Universal Credit system.
But there are also plenty of people who are still on the old-style system, and the final deadline for being moved across has been pushed back to 2024.
Anyone who hasn’t yet been transferred across will be eligible for the one-off £500 payment.
For those on the Universal Credit scheme, Rishi Sunak said the £20 a week boost could remain in place “well beyond” the end of the current national lockdown in England.
You may be eligible for Universal Credit if:
- you’re on a low income or out of work
- you’re 18 or over (there are some exceptions if you’re 16 to 17)
- you’re under State Pension age (or your partner is)
- you and your partner have £16,000 or less in savings between you
- you live in the UK
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