LRD guides and handbook March 2013

State benefits and tax credits 2013

Chapter 2

Working Tax Credit

Working Tax Credit is paid to those who work but are on a low income. A claim for Working Tax Credit is based on the hours you work and get paid for, or expect to be paid for — as either an employee or a self-employed individual. If you are responsible for any children under 16, you could get the Child Tax Credit element of Working Tax Credit. You can also qualify if you have children aged 16 to 19, as long as they are in certain types of education or training.

The maximum Working Tax Credit rates and thresholds for 2013-14 are shown in the tables below. (Figures in brackets show change from 2012-2013).

Working Tax Credit rates 2013-2014

Change from 2012-2013 Annual amount Weekly amount
Basic element unchanged £1,920
Couple and lone parent element plus £20 £1,970
30-hour element unchanged £790
Disabled worker element plus £65 £2,855
Severe disability element plus £30 £1,220
Childcare element (one child) unchanged max £175
Childcare element (two or more children) unchanged max £300

Tax Credit income thresholds and withdrawal rates 2013-2014

The withdrawal rate is the amount that is deducted from the Elements described above. If the gross annual income exceeds a predetermined first threshold of £6,420 (in 2013/14) then the first (and main) withdrawal rate is 41%. This means that for every £1 earned above the threshold, 41p of the WTC entitlement is withdrawn.

Change from 2012-2013
First income threshold unchanged £6,420
First withdrawal rate unchanged 41%
First threshold for those entitled to Child Tax Credit only plus £50 £15,910
Income rise disregard minus £5,000 £5,000
Income fall disregard unchanged £2,500

See below for more information about disregards.