How can tax credits help working families?

Sadly, in today’s economic climate, those who work hard can often struggle financially more than those who don’t work. This means that when it comes down to it, families with children not only have little time to spare thanks to the aggressive nine-to-five working schedule but they also have less income. It is these types of families that need help from our welfare system- but are they getting it? Critics say that the benefits culture is ruining the welfare state as money tends to be spent on the unemployed rather than helping those who work get by. However Tax Credits are helping to change that.

What are Tax Credits?

One way of the British welfare system giving back is Tax Credits. Tax credits are payments from the Government. In order to claim them, you must either have children, be on a low income or both.  It is not unusual to see families claim both type of credits, which are known as Child Tax Credits and Working Tax Credits. They are incredibly useful tools which can be used to give you a slight boost in your household income.

Am I eligible?

So, how do you know if you qualify? Well, if you have children or a low income, you can simply complete a short questionnaire on the Government’s website. To begin, make sure you know how much you and your partner earned in the previous tax year, in this instance 6/4/12-5/4/13. It should only take five minutes but if you are eligible, the difference to your income will be long term.

What will I get?

How much will you get? Well, it depends on your individual circumstances. Many different things can count as a factor, such as how many children you have, whether you live with someone as a couple, how many hours you work if you work, if you pay for childcare and whether you/a child living with you is disabled. Your payments also depend on your income- the lower it is, the more tax credits you can get.

What happens if I am in a couple?

If you are married, in a civil partnership or living together as if you were, you should make a joint claim. Couples claiming Child Tax Credit should decide who the main carer of the child is- rather old fashioned, I know. If you are making a new claim, your payments will run from the date of your claim to the end of the tax year which is normally sometime in April.

So, how can tax credits help you? Well, if like many others, you are feeling the pinch in your purse at the start of a New Year, Tax Credits are designed to make life just that little bit more comfortable. Whether you use yours to put better food on the table or put them towards a weeks holiday in sunny Spain, it’s up to you. Tax Credits are one of the only parts of the British welfare system that actually caters towards families who work rather than the unemployed. So, why wait around for the economic climate to get better? Take your finances into your own hands and call the Tax Credits Helpline to see if you’re eligible to claim!