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This factsheet is a basic introduction to tax credits. You can find out more detailed information in our Disability Rights Handbook, available at www.disabilityalliance.org/drh36.htm.
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This factsheet is a basic introduction to tax credits. You can find out more detailed information in our Disability Rights Handbook, available at www.disabilityalliance.org/drh36.htm.
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Both working tax credit (WTC) and child tax credit (CTC) can include additional 'elements' due to disability, which can increase the amount of your award.
This element is a significant one for disabled people. In addition to working at least 16 hours a week, you have to satisfy two other tests - a ‘disability test’ and receipt (or recent receipt) of a ‘qualifying benefit’. It is the person who meets the work conditions who also has to meet the disability and qualifying benefit tests.
To get the disability element of WTC included in your assessment, you must have a ‘physical or mental disability which puts [you] at a disadvantage in getting a job’ - the notes in the tax credits claim form explain what this means: if you have access to the internet you can download a copy of the TC600 Notes from www.hmrc.gov.uk/forms/tc600-notes.pdf.
To get the disability element of WTC included in your assessment, you must also meet one of the following conditions.
Condition A - At any time in the last 26 weeks before you claim WTC you were getting higher rate short-term or long-term incapacity benefit (IB), severe disablement allowance (SDA) or employment and support allowance (ESA: providing you have been entitled to it for at least 28 weeks – including linked periods and periods on statutory sick pay (SSP)).
Condition B - At any time in the last 26 weeks before you claim WTC you were getting the disability or higher pensioner premium in income support (IS), income-based jobseeker’s allowance, housing benefit (HB) or council tax benefit (CTB).
Condition C - You get disability living allowance (DLA – either component, any rate) or attendance allowance (or an Industrial Injuries or War Pensions scheme equivalent). You must meet this condition throughout the period of your claim, not just at the start of it.
Condition D - On the date of your claim, and throughout your claim you have a Motability car.
Condition E: the ‘Fast Track’ - This is known as the ‘Fast Track’ because it enables people who have been off sick to return to work without having to be either off sick for six months or be on DLA, etc (as in Conditions A to D). The ‘Fast Track’ rules are that –
- you have a disability likely to last at least six months (or for the rest of your life if your death is expected within six months); and
- your gross earnings are less than they were before your disability began, by at least 20% or £15 a week, whichever is greater; and
- ESA, SSP, occupational sick pay, incapacity benefit or income support paid on the basis of incapacity; or
- Class 1 or Class 2 national insurance contribution credits on the basis that you were incapable of work or had a limited capability for work.
Condition F - At any time in the last eight weeks before you claim WTC you:
Condition G - You will be treated as qualifying for the disability element if, within the eight weeks before you make your claim (including renewal claims), you were entitled to the disability element of tax credits by virtue of Condition A, B, E or F. This allows those who were getting a qualifying benefit, such as ESA, to continue to get the WTC disability element for long after they stopped receiving that benefit. If you got the disability element because you met Condition C or D, as you were in receipt of, for example, DLA, you need to be getting that benefit when you make your new, or renewal claim.
This element is different to the disability element. You can get this even if you don’t qualify for the disability element.
This is because there is no requirement that the disabled person must work to get this element so if the worker has a partner who doesn’t work but meets the condition below, they will get the severe disability element included.
To qualify the claimant (or their partner) must receive the highest rate care component of disability living allowance (DLA) or the higher rate of attendance allowance (AA). As it is part of WTC, at least one person must be working (although, unlike the disability element, the disabled person need not be the worker).
If you are part of a couple and both of you meet the conditions, you can get two severe disability elements included in your WTC.
A child or young person qualifies for the child disability element of CTC if:
A child or young person qualifies for the severely disabled child element if the care component of DLA is payable for them at the highest rate or abated while they are in hospital.
Both the disabled child element and the severely disabled child element can be paid together if the qualification criteria are met.
To qualify for working tax credit from 6 April 2012 if you are part of a couple and have children, you must work at least 24 hours a week between the two of you. This is in addition to the existing rule that either you or your partner must be working at least 16 hours a week. But the new rule does not apply if:
If you were entitled to WTC under the existing 16-hour rule but are not entitled to WTC under the new 24-hour rule you could lose WTC of up to £74 a week.
The Revenue suggests that “you can increase the hours you work, so you would still be entitled to Working Tax Credit” but employers are not obliged to agree to an increase in hours.
You can get help and information at your local advice centre, such as a Citizens Advice Bureau. You can get more information about where to get personal advice from our Factsheet F15 - Finding a local advice centre, available at www.disabilityalliance.org/f15.htm.
You might also find the following factsheets useful:
This Disability Alliance factsheet is a basic introduction to tax credits. You can find out more detailed information in Disability Rights UK's Disability Rights Handbook, available at www.disabilityalliance.org/drh36.htm.
All our publications are available at www.disabilityalliance.org/shop.htm. You can also place an order by contacting Disability Rights UK on 020 7247 8776 (this is not an advice line) or by fax on 020 7247 8765. All our factsheets are available at www.disabilityalliance.org/fact.htm.
16 January 2012
