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Why have my working tax credits stopped or gone down?

WORKING tax credit claimants have seen their monthly payments drop recently due to a Covid support change.

Meanwhile, others may have seen their payments stop completely – we explain why and what you can do about it.

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Here's all you need to know about what's happening to your working tax credit payments


Here’s all you need to know about what’s happening to your working tax credit paymentsCredit: Alamy

Why have my working tax credits stopped?

Your tax credits could go up, down or stop if there are changes in your family or work life.

It means you must report any changes to your circumstances to HMRC, which you can do online.

If your payments have suddenly stopped completely, this may be due any of the below reasons:

  • You didn’t report a change in circumstances
  • You didn’t complete your annual review in time
  • You didn’t reply when HMRC wrote to check details of your claim
  • HMRC decided you no longer qualify for tax credits

If you think it’s made a mistake, contact the tax credits helpline on 0345 300 3900.

A few weeks ago, HMRC also started sending out 2.5million renewal packs to tax credit claimants.

The deadline to renew is on July 31, or you risk missing out on the benefits.

Why have my tax credits 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.

It meant working tax credit claimants received an extra ÂŁ20 boost a week.

But this increase was axed when the new tax year began on April 6.

Instead, the government rolled out a ÂŁ500 one off payment, which should’ve been given to claimants no later than April 23.

The Chancellor explained in the Budget in March that working tax credit claimants can’t get a weekly boost because of the way the system works.

The ÂŁ500 payment will match the ÂŁ20 a week uplift that Universal Credit claimants are getting until the end of September.

Who is eligible for the ÂŁ500 payment?

If you claim working tax credits, you will get the ÂŁ500 payment.

The uplift applies to Brits who received the following benefits on March 2:

  • Working tax credit payments
  • Working tax credit and child tax credit payments

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 boost.

If you’re eligible for the payment, you should have been paid automatically by April 23.

You should receive it via the same method that you usually get your tax credits paid.

If the payout doesn’t arrive, you can ask for help via the tax credits helpline on 0345 300 3900.

The Government will continue to treat furloughed working tax credit claimants as working their normal hours.

That’s the same for anyone who is experiencing a reduction in working hours too.

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 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 ÂŁ500 payment.

For those on the Universal Credit scheme, Rishi Sunak said the ÂŁ20 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 ÂŁ16,000 or less in savings between you
  • you live in the UK

We explain five other Universal Credit and benefit changes that were announced with the start to the new tax year.

In other news, Universal Credit claimants are being urged to claim council tax discounts “straight away”.

And Martin Lewis’ MoneySavingExpert is urging workers to claim up to £250 for working from home.

Martin Lewis explains who qualifies for ÂŁ500 working tax credits payment

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