You might have seen the television and press advertisements for the new tax credits. So which of the following people will get extra money from April?
Loretta is a senior manager in social services, earning £55,000 a year. She has one child aged 17, who is studying for A-levels, and has no partner living with her.
Maureen and Tony have three children. Maureen is a home carer, earning £10,000 a year and Tony is a driver for a voluntary organisation, earning £15,000 a year.
Amerjit and Pritpal have two children. Amerjit earns £28,000 a year as a social worker, while Pritpal earns £16,000 as a day centre assistant manager.
Donovan has no children. He is 35 and is disabled. He works 20 hours a week for a voluntary group, earning £10,000 a year.
Louise has two children. She is a student social worker with a £4,000 grant and earns £6,000 a year doing shifts in a care home.
I’ll make it easy for you. They all qualify. Loretta will receive an extra £210 a year on top of her child benefit. Maureen and Tony will get about £545 a year (but perhaps up to £7,030 if they have child care costs). Amerjit and Pritpal also receive £545 extra. Donovan receives £2,360 a year to supplement his wages and Louise £5,255 (or up to £12,575 if she has child care costs).
As you can see, it is not just our clients who could be benefiting from tax credits. With 90 per cent of families entitled to some kind of help, but only about 60 per cent of those eligible actually applying, there are vast numbers of local government, health and voluntary sector staff who could be claiming.
The help for children is called child tax credit (CTC) and the help for those in work is called working tax credit (WTC). Both are administered by the Inland Revenue. You do not have to be working to be entitled to CTC.
Working tax credit is paid to people who are working and:
- Are a lone parent or one of a couple with dependent child(ren).
- Have a physical or mental disability which puts them at a disadvantage in finding a job.
- Satisfy the rules for the New Deal 50+ element.
It is also paid to those who do not fit into the above categories but who are aged 25 or more and working a minimum of 30 hours a week.
Working tax credit includes a child care element (70 per cent of maximum eligible child care costs of £7,020 for one child or £10,400 for more than one child).
The initial application will be based on gross earnings in 2001-2. This can be revised to take into account actual current income. There are no capital limits but actual income from capital is counted (apart from the first £300).
Tax credits clearly have major implications for your charging policies, decisions about fostering and adoption allowances and so on.
But, in the first instance, let’s at least make sure our own staff have the information they need to make a claim.
– Both CTC and WTC are claimed on form TC600, which is available from Jobcentre Plus offices and Inland Revenue enquiry centres. Alternatively, telephone 0845 300 3900.
Gary Vaux is head of money advice, Hertfordshire Council. He is unable to answer queries by post or telephone. If you have a question to be answered please write to him c/o Community Care.