Working Families' Tax Credit (wftc)

.: What is it?

A tax credit for working parents on low or middle incomes.

.: Who gets it?

Families (including one parent families) with at least one child under 16 (or under 19 in full time education), where one parent works 16 hours a week or more. From April 2001 you will be able to claim WFTC while on maternity leave if you are getting SMP or Maternity Allowance. The more children you have, the more you can earn and still get WFTC. On your Child Benefit letter of award
or benefit book there is a personalized message that tells you how much your family can earn and qualify for WFTC.

.: How much is it?

It depends what your income is, how many children you have, how old they are and whether you pay for registered childcare. If your income is less than £92.90 per week you could get the maximum amount. You get less if your income is more and if you have savings of over £3000. Any Child Benefit, Maternity Allowance or maintenance you are receiving is ignored in working out your family income. You cannot get WFTC if you have savings of more than £8000. As a rough guide:-

• If you have one child and you or your partner work for 16 hours or more a week, you could get WFTC if your family earnings after tax are less than £246 a week (of less that £267 a week if you or your partner work for 30 hours or more per week).

• If you have more than one child, or if you are paying for eligible childcare, your income can be higher and you may still Qualify for
  WFTC.

.: How do I claim?

Claim on form WFTC1, which you can get from your Tax Credit office by calling 0845 609 5000 or telephone 0845 606 6668 Alternatively you can call your Benefits Agency / Social Security Agency (social security office) or Jobcentre. You cannot claim before the birth of your first child. Each award of WFTC lasts for 26 weeks and the amount normally stays the same even if your circumstances change. From April 2001 you will be able to apply for additional help as soon as your baby is born, without having to wait for an existing award to end.

However, if your family income has increased since your last claim it may be better to wait until your existing award ends before asking for a new assessment. Seek further advice if you think this applies to you by calling the WFTC helpline on 0845 609 5000. WFTC is paid in your wages or salary if you are employed, or directly into a bank account every two weeks or by a book of orders which you cash at the post office. If you live together, you and your partner can choose which of you receives the WFTC.

.: What about help with childcare costs?

• You may be able to get a Childcare Tax Credit to help with the cost of your childcare, as well as your WFTC. You could get this if:-
  
  • You are a single parent working at least 16 hours a week; or you live in a couple where each of you works at least 16 hours a week; or one of you is disabled.
    
  • AND, you pay for registered childcare (e.g. a child minder, nursery, play scheme or out-of-school club).
    
  • AND, you qualify for WFTC.

If you qualify you could get extra WFTC which will pay for up to 70% of your childcare costs up to a maximum cost of £135 for one child or £200 for two or more children. This means that the Childcare Tax Credit is worth up to £94.50 a week (one child) or £140 a week (two or more children). If you are disabled you should ask your Benefits Agency/Social Security Agency (social security office) about your entitlement to Disabled Persons Tax Credit.

.: Anything else?

If you get WFTC you may also be able to claim a £300 Sure Start Maternity Grant, get formula milk at a reduced price, Housing Benefit, Council Tax Benefit and help with fares to hospital, but these benefits are only available for families on a low income; not all families receiving WFTC will qualify, you will need to check.