Working Tax Credit: Coronavirus

(asked on 16th September 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the financial effect on working tax credits received by health and social care workers of additional hours that have been worked during the covid-19 outbreak.


Answered by
Steve Barclay Portrait
Steve Barclay
Secretary of State for Environment, Food and Rural Affairs
This question was answered on 21st September 2020

The Tax Credit system has a degree of flexibility built in, in order to help claimants manage changes in income. The Tax Credit disregard means that the first £2,500 of a increase or decrease in household income, compared with the previous tax year is disregarded. Therefore carers, NHS staff and other key workers working additional hours and experiencing an increase in income of up to £2,500 per year will see no change in their overall Tax Credit award.

The Government also recognises that Tax Credits were introduced in the early 2000s and no longer fully reflect the world of work for many people. That is why we are introducing Universal Credit.

Universal Credit replaces Tax Credits and other legacy benefits, to provide a single system of means-tested support for working age people. Universal Credit is assessed and paid monthly and is based on claimants’ actual earnings in the month, rather than their annual income.

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