CPAG in Scotland Tax Credits Project: Factsheet 5

Claiming for children: Moving on to child tax credit
(formerly called Claiming for Children: Changing to CTC from IS or JSA)

Introduction
You have some other income
Your youngest child reaches age 12 (or 10)
Some effects of transferring to CTC
Some differences in the tax credit system
Passported benefits
Further information and advice

Introduction

If you claimed income support (IS) or income-based jobseeker’s allowance (JSA) before 6 April 2004 and still have amounts for children in with your IS or JSA you will transfer to child tax credit (CTC) at some point. This means you will start claiming CTC for the children rather than child allowances and premiums of IS or JSA. You will continue to receive IS and JSA premiums and allowances for yourself and your partner. The amount of money you get overall should not go down.

The Government has not made a final decision on when (or if) the transfer will take place. This leaflet tells you more about transferring to CTC.

If you claimed IS or JSA after 5 April 2004 you will already be getting CTC
(see ‘Further information and advice’ below for where to get more leaflets).

Most people do not need to take any action. They get the same amount now as they would on CTC. But others might be better off on CTC or might have no choice about it. For example, you might claim CTC instead of having amounts for children in your IS or income-based JSA if:

• You have some other income as well as your IS/JSA or child benefit, such as child support (see below)
• You are a lone parent on IS whose youngest child reaches age 12 (or from October 2009, age 10) (see below)

You have some other income

You can choose to claim CTC rather than the child premiums and allowances of IS or JSA. However, only a minority will be better off. These are, generally, people whose IS or JSA tops up other income like child support, incapacity benefit or a student grant or loan so that, once CTC is awarded, their income is too high to continue getting IS or JSA.

Before deciding whether to claim early you should ask the jobcentre for a ‘better-off’ calculation to compare your income before and after claiming CTC. If you won’t be better off there is no point in claiming before being transferred. Also, you may want to consider some of the effects of transferring to CTC (see below).

Your youngest child reaches age 12 (or 10)

As a lone parent of a child under 12, you can claim IS. But once your child reaches his or her 12th birthday, or from October 2009, 10th birthday, you are expected to claim income-based JSA instead. Your JSA won’t have amounts for children included. You should claim CTC as well.

Some effects of transferring to CTC

Most people will stay on IS or JSA once they transfer to CTC. Their housing benefit and council tax benefit will not be affected. Some people, like Madhu in the example above, will stop getting IS or JSA. They will no longer be able to access social fund budgeting loans or community care grants although access to some other passported benefits should be protected (see Passported benefits below). Housing benefit and council tax benefit may go down because tax credits are taken into account in working out how much you get. You should tell the council housing benefit office if your IS or JSA stops.

Some differences in the tax credit system

Overpayments
Overpayments of tax credits are common. They can arise from mistakes by the Tax Credit Office or changes in your circumstances that you have not told the Tax Credit Office about. See our leaflet Tax credits overpayments.

Annual claims
You need to renew your tax credits claim each tax year. You also need to finalise your claim at the end of each tax year. This is done by completing an annual review and declaration. The necessary forms will be sent to you by the Tax Credit Office in May-June each year, and need to be returned promptly.

Changes in income
While you are getting IS or income-based JSA, your income level does not affect your CTC (you get maximum CTC). Others may need to report changes in income. If your IS or JSA stops, you should tell the Tax Credit Office.

Other changes
It is important to tell the Tax Credit Office when circumstances change so that you are not overpaid, paid too little or even given a penalty. See our leaflet Tax credits – reporting changes of circumstances.

Passported benefits

If you get IS or income-based JSA, you are eligible for health benefits, free school meals and certain other benefits automatically. If you remain on IS or JSA after the transfer to CTC, these passported benefits are not affected.

If the change to CTC takes you off IS or income-based JSA then:

• You cannot get a community care grant or budgeting loan
• You can still get free school meals, milk tokens, and free vitamins if annual income for CTC purposes is under £16,040 (2009/10 rate)
• You can still get a sure start maternity grant and social fund funeral payment if CTC is paid at an amount above the basic family element
• You can still get health benefits if annual income for CTC purposes is under £15,276 (2009/10 rate)

Further information and advice

CPAG in Scotland Tax Credits Project summary webpages

Child Poverty Action Group in Scotland
0141 552 0552 advice line for advisers on benefits and tax credits,
Monday, Tuesday, Wednesday and Thursday 10am to 12pm

Email: advice@cpagscotland.org.uk
email advice for advisers on benefits and tax credits

CPAG publishes the Welfare Benefits and Tax Credits Handbook, a comprehensive guide to benefits and tax credits for claimants and advisers.

CPAG in Scotland’s advice line is only for advisers. If you are having problems with your own tax credit or benefit claim and are in need of advice you should contact your citizens advice bureau or other local welfare rights service.

© Child Poverty Action Group, April 2009

Child Poverty Action Group is a charity registered in England and Wales (registration number 294841) and in Scotland (registration number SC039339). Company limited by guarantee registered in England (registration number 1993854). Registered office: 94 White Lion Street, London N1 9PF

CPAG in Scotland’s Tax Credit Project is funded by the Scottish Government.

This fact sheet was last updated April 2009