CPAG in Scotland: Tax credits for term-time and seasonal workers is one of a series of Child Poverty Action Group in Scotland leaflets giving guidance to advisers and those working with families in Scotland about aspects of the tax credit system of particular concern. Child Poverty Action Group promotes action for the prevention and relief of poverty among children and families with children

CPAG in Scotland Tax Credits Project: Factsheet 19

Tax Credits for Term-time and Seasonal Workers

Tax credits for term-time and seasonal workers is one of a series of Child Poverty Action Group in Scotland leaflets giving guidance to advisers and those working with families in Scotland about aspects of the tax credit system of particular concern. Child Poverty Action Group promotes action for the prevention and relief of poverty among children and families with children.

Who is a ‘term-time only’ worker?
How are ‘term-time only’ worker’s hours calculated?
How does being a ‘term-time only’ worker affect a WTC award?
What if I am not paid during the school holidays or other breaks?
What if I am not sure whether I count as a ‘term time only’ worker?
Further information and advice

In order to qualify for working tax credit (WTC), you must be in full-time paid work – called remunerative work by the Revenue. The number of hours required (16 or 30 as the case may be) will depend on your circumstances. For more information see CPAG in Scotland’s leaflet Tax credits – the basics.

The general rule is that hours are calculated by looking at the hours you normally do each week. However, if you are what is known as a ‘term-time only’ worker, special rules apply.

Who is a ‘term-time only’ worker?
You are a ‘term-time only’ worker if you have a recognisable work cycle that lasts a year (eg, in a school or other educational establishment) and have periods of school holidays or similar breaks when you do not work. You can also count as a term-time only worker if you do not work in an educational establishment, but you do have a contract that allows you not to work during term times or broadly similar holidays.

If you are a seasonal worker eg, you have temporary contracts to work only in the summer, the Revenue says you do not count as a ‘term-time only’ worker.

How are ‘term-time only’ worker’s hours calculated?
For ‘term-time only’ workers, the school holidays or other similar breaks are ignored in working out whether you do sufficient hours to count as in full-time paid work. This means that you only look at the hours of work you normally do during term-time or other periods when you are working. If these are sufficient (16 or 30 as the case may be), you count as in full-time paid work throughout the year, even if you are not paid during the school holidays or other similar breaks.

Example
Mel is a school dinner worker. She is a lone parent with three school age children. She works 20 hours per week during the school year. She does not work and is not paid during the school holidays (12 weeks). The fact that she does not do any hours during the school holidays is ignored. Mel need only do 16 hours per week, so she qualifies for WTC throughout the year because she normally works 20 hours per week during term-time.

If you are a seasonal worker who does not count as a term-time only worker, the Revenue says this special way of working out your hours does not apply. So, for example, if you work 40 hours a week for 4 months each summer, you can claim WTC during the 4 summer months, but not during the rest of the year when you are not working.

If the Revenue decides that you do not count as a ‘term time only worker’ and you disagree, you can appeal against that decision (see below).

How does being a ‘term-time only’ worker affect a WTC award?
In calculating WTC, income is not averaged on a weekly or monthly basis. It is annual income paid during the whole tax year that is taken into account.

Example
Let us say that Mel is paid £120 gross per week during term-time and that this is her only income for WTC purposes. Her annual income for WTC purposes is £120 X 40 weeks = £4,800. This is below the relevant threshold, so she qualifies for maximum WTC (and CTC) throughout the year.

What if I am not paid during the school holidays or other breaks?
Even if you are being paid WTC (and CTC) during the school holidays or other breaks you may find it difficult to manage, if you are not paid any wages during that period. In this case, you might be able to sign on and claim jobseeker’s allowance (JSA).

To qualify for JSA, you must not be in full-time paid work. This means you must do less than 16 hours work per week (and your partner must do less than 24). Like WTC, there is a ‘term-time only’ worker rule. But, the rule for JSA operates differently. The hours you work are averaged over the whole work cycle including periods when you do not work, but disregarding weeks when you are on paid holiday or absent from work because of illness, on maternity, paternity or adoption leave or absent from work without good cause. If your hours are low enough, you count as not in full-time paid work throughout the cycle.

Example
Mel works 20 hours per week during the school year (40 weeks). She does not work and is not paid during the school holidays.

20 hours X 40 weeks = 800 hours. There are no weeks to be disregarded. So:
800 / 52 weeks = 15.38 hours per week.

Mel is doing less than 16 hours per week, so she can claim JSA. Earnings affect the amount of JSA she can get, and for income-based JSA, any WTC she is paid is taken into account as income, so her income is unlikely to be low enough during periods when she is being paid. However she might qualify for JSA during the summer holidays.

For JSA, the hours of work for a seasonal worker in some cases, are also averaged this way over the whole annual cycle of work. This is likely to happen where you and your employer both expect that you will work again the following season. So you would only qualify for JSA if your annual average hours were less than 16 (24 for a partner) a week. If your re-employment is less certain, you should not be treated as being in work during the off season.

What if I am not sure whether I count as a ‘term time only’ worker?
Sometimes it can be difficult to know whether you count as a ‘term time only’ worker, for example, if you have a temporary contract but there is an expectation that it could be renewed after an unpaid break. In this situation it can take some time before it becomes clear that you are a ‘term time only’ worker.

It is also possible that, because the rules for WTC and JSA work differently, you could be refused both benefits on the same facts. For example, when you stop work, you could be refused WTC on the basis that you no longer count as being in remunerative work, and be refused JSA on the basis that you are a ‘term time only’ worker with average weekly hours of more than 16. If this happens you should appeal against both decisions. For more information about appealing against tax credits decisions see CPAG in Scotland’s leaflet Tax credits – challenging decisions.

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 12 noon

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

Website: www.cpag.org.uk
for more tax credit leaflets from CPAG in Scotland

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.

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