what is Working Tax Credit?

Working Tax Credit (WTC) tops up the pay of low paid workers. It is made up of a basic element, plus extra amounts for:

• people 50 or over who are returning to work (after receiving certain benefits for at least 6 months)
• people who work thirty or more hours a week
• disabled workers
• someone with a severe disability
• people needing help with childcare costs.

The amount claimants get also depends on how much pay and other income they have.

Apart from the childcare element, WTC is usually paid to workers via their employers, in their pay cheque. (Inland Revenue pay WTC directly to self-employed people and to people working for employers who do not operate a PAYE scheme).

Anyone with responsibility for children who qualifies for Working Tax Credit will also qualify for the new Child Tax Credit. Child Tax Credit (and the childcare element of WTC) is paid directly by the Inland Revenue to the person who is mainly responsible for looking after the children, not through the pay cheque.

But workers don't have to have children to qualify for WTC. People who are not responsible for a child and don't have a disability, can still claim, provided they are aged at least 25 and work 30 or more hours a week. (Those who are disabled or responsible for a child need to work only 16 hours a week to qualify.)