Working Tax Credit and people who have recently stopped working

Working Tax Credit and people who have recently stopped working

Working Tax Credit is normally only payable to people who are in work and meet certain work hours rules. However, if you or your partner can't work because you are on maternity, paternity or adoption leave or you are ill, you may still be treated as working and be able to continue receiving Working Tax Credit or receive it for the first time. Whether you are entitled to Working Tax Credit will depend on what your usual working hours were before you went on leave and the length of time you will be off work. 

Maternity, paternity, adoption leave

While on maternity, paternity, shared parental or adoption leave you will still be considered to be working for the purposses of Working Tax Credit, and doing so for the same number of hours you did immediately before going on leave. This can continue for up to 39 weeks of leave.

To qualify for Working Tax Credit,  immediately before going on leave you must have worked on average for 16 hours a week if you are (or will be) a single parent or a combined 24 hours a week (with one of you working at least 16 hours) for a couple. 

The same rules apply if you are self-employed and you would have been entitled to maternity, paternity, parental or adoption leave if you had been employed.

Sick Leave

If you are an employee, you will remain entitled to Working Tax Credit for the first 28 weeks that you're off work, as long as:

  • your usual working hours are at least 16, 24 or 30 (For more information on the work hours rules see Working Tax Credit)
  • you worked these hours immediately before going off work
  • you are paid a specific sickness or disability benefit

The specific sickness or disability benefits are:

  • Statutory Sick Pay
  • Employment and Support Allowance
  • National Insurance credits awarded because of incapacity for work, or limited capability for work

The same rules apply if you are self-employed and you would have been entitled to receive one of the specific sickness or disability benefits above if you had been employed.

If you are off work for more than 28 weeks

Your Working Tax Credit payments could end if you don't go back to work after 28 weeks, even if you keep getting:

  • Employment and Support Allowance
  • National Insurance credits on the grounds of incapacity for work, or limited capability for work 

If you don't go back to work after 28 weeks, you must tell the Tax Credit Office within one month. If you don't you may be charged a penalty. You can contact the Tax Credit Office by calling the Tax Credit Helpline on 0345 300 3900.

The entitledto benefits calculator and leave from work

The calculator cannot look at your eligibility for out-of-work benefits and Working Tax Credit at the same time.

If you enter that you are not currently working the calculator looks at your eligibility for out-of-work benefits such as Income Support or Employment and Support Allowance. You should tell us about any payments you are currently receiving such as Statutory Maternity Pay or Statutory Sick Pay on the benefits you receive page.

To find out whether you could get Working Tax Credit you should enter your details for your work hours immediately before you went on leave. In the income section you should enter you current earnings which may include statutory and contractual payments.

In some circumstances you can be eligible for out-of-work benefits and Working Tax Credit at the same time. The rules determining how much help you will get are extremely complex and we would strongly advise you to get more detailed advice about the help that you are likely to receive.

The Tax Credit Helpline 0345 300 3900 is open Monday to Friday 8.00 am to 8.00 pm, and Saturday 8.00 am to 4.00 pm. Closed Christmas Day, Boxing Day and New Year's Day.

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