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Working Tax Credit and people who have recently stopped working

Working Tax Credit and people who have recently stopped working

If you are employed but currently on leave from work because you are on maternity, paternity or adoption leave or you are ill, as long as you are claiming tax credits before going on leave, you may still be treated as working and be able to continue receiving Working Tax Credit or newly qualify for it while you are off work. It is important to point out here that you can only make a new claim for Working Tax Credit if you are already claiming Child Tax Credit.

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 purposes 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 ordinary leave and the first 13 weeks of additional 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
  • a combined 24 hours a week (with one of you working at least 16 hours) for a couple with children

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.

If you don't qualify for Working Tax Credit based on your work hours before going on leave you may qualify for Universal Credit instead.

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 meet 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

You should enter your current work hours (which may be 0) and tell us about any payments you are currently receiving such as Statutory Maternity Pay or Statutory Sick Pay on the benefits you receive or disability benefits page.

Later in the calculator we will ask how many hours you were working immediately before you went on leave. 

The rules determining how much help you will get during leave from work 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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