How will Universal Credit affect my child and working tax credits?

UNIVERSAL Credit is gradually replacing child and working tax credits - wrapping benefits into one monthly payment.

The government has pledged to move everyone receiving these benefits onto the new system by 2024, though the schedule has been delayed several times.

If you’re already getting tax credits, you will not need to do anything unless your circumstances change, in which case you need to let the Department for Work and Pensions know.

At that point, you may be moved to the new Universal Credit system, which means the amount of money you get is likely to change.

The government is also shifting 10,000 people to Universal Credit to trial the changeover process.

If this is you, the DWP will be in touch to let you know your benefits are moving over.

How will Universal Credit affect my Child Tax Credit?

If you experience a significant change in circumstances - such as starting work, moving in with a partner, or having another child - you will be asked to move from tax credits to Universal Credit.

If your children were born before 6 April 2017 you can claim for them until they turn 19 if they are in full time approved education or training, but not at university.

But, if your one or more of your children is born on or after 6 April 2017, you will only be able to claim for the first two unless you had a multiple birth or have adopted.

Under the Universal Credit system, you will receive monthly payments that will include both a child element and a childcare cost element.

The child element is intended to help with the cost of raising children, while the childcare cost element lets you claim back up to 85 per cent of your monthly registered childcare costs up to a cap.

There is also a separate element to support the care of disabled children.

Depending on the age of your children, there are certain things you must do when claiming Universal Credit to continue receiving your benefits.

For example, if your child is under one years old, you won’t be expected to work.

But, if your child is aged between one and 12, you will be expected to look for part-time work.

If your child is over 13 you'll be expected to look for full-time work.

The amount you receive could go up or down when you switch to Universal Credit, depending on your new circumstances.

You can use an online calculator to work out what you will get.

How will Universal Credit affect my Working Tax Credit?

You will usually be asked to switch to Universal Credit from Working Tax Credit if your circumstances change significantly.
For example, if you start start working less than 16 hours a week, were on Working Tax Credit and become sick, have a child, or start renting a property.

Universal Credit payments adjust each month based on your earnings, so if your earnings drop one month you will receive more benefits to make up the shortfall.

But if you work extra hours, get a bonus or a pay rise your benefit payments will stop.

There’s also no limits to the amount of hours you have to work as there are with Working Tax Credit.

For the DWP to track your income, either you or your employer need to declare your earnings each month.

To continue claiming Universal Credit, you will be expected to be working the equivalent of 35 hours a week at minimum wage.

If you earnings are below that amount, you will be expected to prove you are looking for better work.

Find out more about what Universal Credit is and whether you might be eligible for a claim.

The more you earn the less you'll get, because of the taper system - here's how it works.

Universal Credit claimants often struggle with the five-week wait for payments, but now you can get an advance.