Bamboozled by benefits? They hope you won't be

Tax credits are notoriously complicated, and the Government hasn't made them any more accessible by tinkering around with the current system, even though it is still relatively new.

Money net

Tax credits are notoriously complicated, and the Government hasn't made them any more accessible by tinkering around with the current system, even though it is still relatively new.

That's why Gordon Brown has launched a campaign to encourage people to register for the new Child and Working Tax Credits, which will entitle them to an extra £2.7bn worth of benefits when they are introduced next April.

The new tax credits, which will benefit around six million families, streamline a multitude of existing benefits. The Child Tax Credit brings the child elements of Income Support, the Jobseeker's Allowance, Working Families' Tax Credit (WFTC), Disabled Person's Tax Credit (DPTC) and the current Children's Tax Credit into one system. Instead of being paid through the wage packet to the main earner (normally the father), the Child Tax Credit will be paid via direct credit into the bank account of the main carer, usually the mother.

The Working Tax Credit offers help to low-paid couples and childless individuals, broadly replicating the adult support in the WFTC and extending the principles of the WFTC and DPTC to create one transparent instrument, paid through the wage packet.

"It is very difficult to tell how these new credits will work because there are many more people potentially able to claim," says Francesca Lager- berg, national tax director at Smith & Williamson, the independent professional and financial services group. "There was a slow take-up of the existing credits because the forms were quite scary. Hopefully, the new campaign will mean those entitled to claim do so."

To calculate how much your family is entitled to, check the tax credits website, which also allows people to claim online (see below). As a rough guide, for families with two children, Child Tax Credit and Child Benefit together will provide at least £26.80 a week in support guaranteed for all families; £37.20 for families with an income of less than £50,000; and £92.50 for those with an income of less than £13,000 a year. The Child Tax Credit will be extended to students and student nurses, who are currently excluded from all but child benefit.

The Working Tax Credit extends support for the first time to those aged 25 or over without children or a disability who work at least 30 hours a week. These people will get a guaranteed minimum income from full-time work of £183 for couples and £154 for single people.

To make sure you get what you are entitled to, register as soon as possible rather than waiting until the new credits are introduced. The Government estimates that nine out of 10 families with children will benefit, so a lot of people have work to do.

Since mid-August, the Inland Revenue has been issuing claim packs to WFTC, DPTC and Children's Tax Credit recipients. Later this year, it will send reminders to families who have received a pack but have yet to make a claim. These will stress that a claim should be made before April to ensure payment of the new credits can start as soon as they are available. If you have trouble filling out the forms, help is available free from Citizens Advice Bureaux.

For details and to claim online, go to www.inlandrevenue.gov.uk/taxcredits. Or visit one of the Inland Revenue Enquiry Centres (look in the phone book for your nearest one or call the helpline: 0800 500222). Citizens Advice Bureaux: check phone book for your local branch or go to www.nacab.org.uk or www.adviceguide.org.uk

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