MONEY COMMENT
Your Money From The Government

By Cliff D'Arcy
June 4, 2003

The introduction of the new tax credits for families and low-income workers has been nothing short of a national scandal, with millions of low-income families left short. One claimant even glued his hand to a desk in the tax office and refused to leave until he'd been paid!

Unfortunately, my wife and I have been dragged into this shambles. While I was out of work last year, I applied online for the Child Tax Credit and Working Tax Credit as, at the time, our only income was my wife's part-time salary. However, I've been working at the Fool since January and our combined income is now greater than the upper limit for these credits, which means that we are not entitled to any handout whatsoever.

I didn't notify the Inland Revenue (IR) of my return to work, as it knew already, having sent me a tax rebate shortly after I stopped claiming Jobseeker's Allowance. Nevertheless, a flood of correspondence has started spewing through our letterbox, informing us that we will receive around £5,000 a year towards raising our child.

We've already received one monthly payment (with more to come), but we're entitled to absolutely nothing and will eventually have to pay all this money back. My wife tried to call the IR helpline a couple of times, until I pointed out that some poor folk have tried ringing 300 times or more without speaking to a person. I think we'll write the IR a letter and hope it sorts things out before we both retire(!)

In the meantime, I've had several e-mails from Fools asking for information on the benefits that families with children can claim. Here is a basic summary of what's on offer:

• The Child Tax Credit, which replaced the less generous Children's Tax Credit
• The Working Tax Credit, which replaced the Working Families Tax Credit
• Child Benefit (see this article)
• The Child Trust Fund, a payment of £250 (£500 for low-income families) held in trust for your child until s/he is eighteen.

For details on all the benefits you might be entitled to, check out the Department for Work and Pensions web site. Also, take a look at this article on new rights for working parents (including paternity pay and improved maternity pay), and this item on managing your money better.

More: Why Women Lose Out Financially | Saving For Children