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Child tax credit can ease your family expenses

Tax credits were introduced in 2003 by the then chancellor Gordon Brown to help lift families out of poverty. The system has experienced its share of challenges over time with fraud, overpayments, complexity and errors, but it can still benefit your family by easing the high costs of family expenses. One of the tax credits you can benefit from under this system is child tax credit.

How child tax credit works

Child tax credit is a benefit paid out to parents and carers who are responsible for raising at least one child. Payments are made based on current personal circumstances, such as your annual income, how many children you have and whether you are employed or not. The child has to be living under your roof or meet HM Revenue Customs’ (HMRC) definition of 'young person' to get the benefits.

According to HMRC, a child becomes a young person beginning 1 September after their 16th birthday. The child remains a 'qualified young person' until their 20th birthday, as long as they are in full-time education or engaged in an approved training course before their 19th birthday. You cannot claim child tax credits if your child is at university or enjoying other benefits like job seeker’s allowance.

Child tax credit payments

Child tax credit payments are made in either of four parts: a 'family element' worth up to £545 a year, 'child element' worth up to £2,690 a year, 'Disabled child element' worth up to £2,950 a year and 'Severely disabled child element' worth up to £1,190 paid annually on top of any disability element per child, as of the 20011/2012 tax year. Payments can be paid either weekly or after every four weeks.

How to claim child tax credit

Child tax credit claims have to be made jointly by the couple responsible for the child or children in question. Neither parent can make a tax credit claim alone. If parents are divorced or live separately, tax credit payments are given to the parent with whom the child lives. Call Tax Credit Helpline on 0845 300 3900 to get a tax credits claim pack. This is the only way to apply for child tax credit, as of 2012. The lines are usually open daily from 8am to 8pm.

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