Working tax credit £500 payment: How to claim and who is eligible

Working tax credit £500 payment: How to claim and who is eligible

BRITS who claim working tax credit can claim a one-off payment worth £500 to help them through the Covid crisis.

The payout is supposed to echo the six month extension to the £20 a week boost in Universal Credit payments that was announced last month. 

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In the March Budget, the Chancellor explained that because of the way that the working tax credits system works, people will not be able to get the extra weekly £20 extended.

Instead, the cash will be given in a lump sum – but how do you get it? We explain all you need to know.

Who is eligible for the £500 payment?

If you claim working tax credits, you could get the £500 payment.

Brits will be able to get the cash if they received the following benefits on March 2:

  • Working tax credit payments
  • Working tax credit and child tax credit payments

Those who get child tax credit payments and are eligible for working tax credit but do not get payments because their income is too high will also be able to get the payment.

You’ll get a £500 payment this time around due to the way the working tax credits system works.

It will match the extra weekly £20 boost that Universal Credit claimants will get for another six months.

In the previous 12 months, the basic element of working tax credit was hiked by the same weekly sum.

However, this increase was axed from April 6 as the new tax year started, and will now, instead, be replaced by the separate one-off payment.

How do I get it?

You do not need to apply to get the new payment.

HMRC will text you or send you a letter to confirm if you’re eligible for the payment.

If you’re eligible for the payment, you should automatically be paid by April 23.

You should receive it via the same method that you usually get your tax credits paid.

If the payment doesn't arrive, you can ask for help via the tax credits helpline on 0345 300 3900.

The government will also continue to treat working tax credit claimants who have been furloughed, or experienced a temporary reduction in their working hours, as working their normal hours.

This allows these claimants to remain eligible for working tax credit rather than losing the benefit because the pandemic has impacted their earnings.

How do I claim working tax credit?

You can no longer apply for working tax credit.

This is because it has been replaced by the Universal Credit system, which you can apply for instead.

Lots of people have been switched from tax credits to the newer Universal Credit system.

But there are also plenty of people who are still on the old-style system, and the final deadline for being moved across has been pushed back to 2024.

Anyone who hasn't yet been transferred across will be eligible for the one-off £500 payment.

How do I apply for Universal Credit?

HERE’S all you need to know about applying for Universal Credit.

You'll need to apply to the new welfare system via the website, starting by setting up an online account.

To make an account, you'll need an email address and a phone number.

After that, you'll need to answer a set of questions about your current circumstances, known as your "to do list".

These include things like when you last received payment for a job, what your household income is and how many people depend on you financially.

If you've lost your job, Citizens Advice recommends that you don't apply until you've received your final wages or any final holiday pay.

This is because any money you receive after you've applied for Universal Credit will count as income and mean that you're entitled to less in your first payment.

You will then need to confirm your identity online.

In certain circumstances, you'll be able to apply over the phone, such as those who don't have regular access to the internet, are visually impaired, or have a physical condition that stops you from using a computer or smartphone.

To do this, you will need to contact the Universal Credit helpline to ask if you can apply by phone or arrange a home visit.

In this case, someone can call them on your behalf if you can't do it yourself.

For those on the Universal Credit scheme, Rishi Sunak said the £20 a week boost could remain in place "well beyond" the end of the current national lockdown in England.

You may be eligible for Universal Credit if:

  • you’re on a low income or out of work
  • you’re 18 or over (there are some exceptions if you’re 16 to 17)
  • you’re under State Pension age (or your partner is)
  • you and your partner have £16,000 or less in savings between you
  • you live in the UK

The weekly £20 Universal Credit boost was extended for six months in the Budget on March 3.

We explain five other Universal Credit and benefit changes.

That's as Universal Credit claimants are being urged to claim council tax discounts "straight away".

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