Tax credits: changes from 6 April 2012

From 6 April 2012 there will be a number of changes to tax credits (working tax credit (WTC) and child tax credit (CTC)).

Working hours requirement

– From 6 April 2012, couples with children must work at least 24 hours a week between them, with at least one of them working 16 or more hours. If only one member of the couple works, that person must work at least 24 hours.

– People aged 50 or over: From 6 April 2012, those aged 50+ who are not responsible for any children will need to work at least 30 hours a week to qualify for WTC.

– Those aged 50+ who are responsible for at least one child will still qualify for WTC if they are:

– a single claimant and work at least 16 hours a week: or
– are in a couple and meet the new working hours rules for couples (see above).

Withdrawal of family element of CTC
From 6 April 2012 the £545 family element of CTC will start to be withdrawn immediately after the child element.

The end of the 50+ element of WTC

This will be withdrawn from 6 April 2012. The 50+ element is currently available to people aged 50 or more for the first year when they return to work after receiving certain benefits.

Backdating period changes from three months to one month
From April 2012, backdating of a new claim or of an increased award following a change of circumstances will be limited to one month.

Disregard for falls in income
From 6 April 2012, there will be a new feature in the system – an income disregard of £2,500 for falls in income. Currently, if income falls by any amount as compared to the previous year, tax credits are adjusted so that the claimant receives an amount based on their new (lower) income. The new disregard means that tax credits will not be adjusted until income falls by more than £2,500 compared to the previous year.

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