MILLIONS of Brits on tax credits are set for a pay rise within weeks as rates are set to rise.
There are two types of tax credits – working tax and child tax credit.
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They’re given to people if they’re on low incomes, are registered as disabled or have children that are dependent on them.
Many people have been switched from tax credits to the newer Universal Credit system.
But there are also plenty of people still on the old-style system.
Tax credits must be renewed each year last year HMRC sent out 2.5million information packs.
Tax credit rates vary depending on your personal situation, but you can get up to £3,240 for working tax credit or up to £3,435 for child tax credit.
But those amounts are rising in just a few weeks which could increase your payments.
Many benefit rates are rising in April by 3.1% to keep up with rising prices.
But the costs of things like energy and food are rising at a higher rate of 5.5% and could hit as high as 8% this year.
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That means despite the increase to benefit rates it could leave you feeling worse off.
Millions of Brits are missing out on billions of pounds of benefits cash between them so it’s worth checking you’re getting all the cash you’re entitled to.
You can check by using an online benefits calculator, which are offered by charities such as Turn2Us and EntitledTo.
And if you’re struggling with bills there’s further help you can get – check it out here.
Here’s how much more you’ll get in tax credits from April.
Working tax credits per year
- Basic element, from £2,005 to £2,070
- Couple and lone parent element, from £2,060 to £2,125
- 30 hour element, from £830 to £860
- Disabled worker element, from £3,240 to £3,345
- Severe disability element, from £1,400 to £1,445
The childcare element of working tax credits will remain the same at £175 and £300, depending on the number of children and costs covered will remain 70%.
Child tax credits per year
The family element of child tax credits will remain the same at £545.
- Child element, from £2,845 to £2,935
- Disability element: disabled child rate, from £3,435 to £3,545
- Disability element: severally disabled child rate, from £1,390 to £1,430
The income threshold for tax credits will rise from £6,565 to £6,770 and the withdrawal rate will remain 41%.
Working Tax Credits and Child Tax Credits are being replaced by Universal Credit.
If you’re not already claiming theses tax credits then you can’t make a fresh claim for the now.
Everyone claiming Tax Credits will be moved over to Universal Credit by September 2024 under the government’s plans for the gradual roll out of the new welfare system.
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