Benefits you're entitled to: Child tax credit

Published by Edmund Greaves on 21 January 2015.
Last updated on 31 July 2017

Child tax credit is a benefit you may be entitled to if you’re responsible for children.

However, many families do not get the help that they need, either because they do not understand the system, or because they think that they are not entitled to anything.

Here's the Moneywise guide to claiming child tax credit.

What is it?

This payment is meant to help with the cost of bringing up children. It does not include help with childcare, which comes under working tax credit. You don’t need to be in work to claim child tax credit.

Children you are claiming for must be 16 or under, or aged between 16 and 20 and in fulltime ‘non-advanced' education (eg, sixth form rather than university).

You can only make a new claim for child tax credit if you don’t live in a universal credit area or you have three or more children or you or your partner qualify for pension credit.

Universal credit is currently being rolled out in stages across the country with every area due to get it by September 2018. It will replace Jobseeker’s Allowance, Child, Housing and Incapacity Benefit with one monthly lump sum.

How much might you get?

Child tax credit is means tested, but it is complicated to try and work out how much you will get. The amount you get also depends on whether your children were born before 6 April 2017.

The basic amount – known as the ‘family element’ is £545 a year, but many people receive extra elements on top of this, up to £2,780 per child.

Here’s the full list of elements you could be entitled to:

  • The basic amount (this is known as ‘the family element’) - up to £545
  • For each child (this is known as ‘the child element’) - up to £2,780
  • For each disabled child - up to £3,175 (on top of the child element)
  • For each severely disabled child - up to £1,290 (on top of the child element and the disabled child element)

The maximum household income limit for child tax credits is £65,000 but this amount reduces depending on how many kids you have and whether you have to pay for their childcare. Those limits are:

  • £25,000 for one child with no childcare costs
  • £35,000 for two children with no childcare costs
  • £40,000 for three children with no childcare costs
  • £40,000 for one child with childcare costs
  • £55,000 for two children with childcare costs
  • £65,000 for three children with childcare costs

This means that once your children get older and go to school, you could lose eligibility, depending on your household's income. Payments are also affected by the benefits cap, which limits how much you can be paid for certain benefits.

This means that when all your benefits are totalled, your housing benefit or universal credit will be reduced so that it does not exceed the cap. The monthly benefits cap is currently:

  • You live inside Greater London: £442.31 for a couple, whether your children live with you or not, or if you’re single and your children live with you.  
  • You live in greater London: £296.35 for a single person without children or not living with their children.
  • You live outside Greater London: £384.62 for a couple, whether your children live with you or not, or if you’re a single parent and your children live with you.
  • You live outside Greater London: £257.69 for a single person without children or not living with their children.

Use the government’s tax credit calculator to work out what you’re eligible for. The tax credits government helpline is also available on 0345 300 3900.

How do I claim?

If you’re new to tax credits, you’ll need to order a claim form. This can take up to two weeks to arrive in the post, and five weeks to fully process. You can start the process of ordering a tax credits claim form on the government website.

How can I work out what other benefits I'm eligible for?

The charity Turn2us.org.uk has a calculator that enables you to input all your circumstances and it will work out your benefit entitlements. The charity also has a free helpline on 0808 802 2000.

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