Tax credits and early years ebulletin | CPAG

Tax credits and early years ebulletin

25 September 2020
September 2020


Tax credits changes

The childcare element of working tax credit (WTC) is payable to claimants in work, including those who are still treated as in work while impacted by coronavirus. It can cover 70% of registered childcare costs incurred, within limits. During lockdown, HMRC had continued to pay the childcare element for people still incurring registered childcare costs, even if childcare had not been provided due to coronavirus. HMRC has announced that from 7 September 2020, the childcare element of WTC is no longer paid for childcare that is not being provided. From 7 September, the child must be attending childcare in order for the claimant to get help with childcare costs.

From 25 September 2020, another change has added some clarification:

  • Payments from the Self Employment Income Support Scheme and other coronavirus-related self-employed support payments count as taxable income, so they do not need to be separately counted for tax credits purposes.
  • The £60,000 NHS and social care death in service payments, are capital, so do not need to be specifically disregarded as income.
  • Payments under the new Self Isolation Payment Scheme (being trialled in high risk areas of England) are disregarded as income.
  • The definition of ‘furloughed’ is also amended to cover workers on ‘flexible furlough’, so that they are still treated as in work for WTC purposes, regardless of actual hours currently worked.

View the Tax Credits (Coronavirus, Miscellaneous Amendments) (No. 2) Regulations 2020

Child Trust Fund

Access to Child Trust Funds is now available for young people who turned 18 from 1 September 2020. Child Trust Funds were set up for children born between 1 September 2002 and 2 January 2011. The government made payments for all children, with higher amounts made to lower incomes and disabled children. Parents, family members or friends could make further payments, within annual limits, which would earn tax-free interest. Child Trust Fund accounts should have been opened in the child’s name even if the parents failed to do so, and by a local authority on a child’s behalf if the child was looked after. The amount in a Child Trust Fund counts as the young persons’ capital for universal credit if they are claiming in their own right.

See for more information, including how to trace a Child Trust Fund.

Scottish Child Payment

The Scottish Government has confirmed that the Scottish Child Payment for families with a child under six will open for applications in November 2020, with first payments beginning from the end of February 2021. The payment will be £10.00 a week per child, for families in receipt of:

  • universal credit
  • child tax credit or working tax credit
  • income-based jobseeker’s allowance
  • income-related employment and support allowance
  • income support
  • state pension credit

Payments will stop when the child reaches the age of six, but the Scottish Government remains committed to rolling out the benefit to families with children under 16, planned for the end 2022.

View the draft regulations

Free School meals

There has been a small change to the eligibility criteria for free school meals for people entitled to working tax credit, which should ensure that those working 16 hours a week at the minimum wage continue to qualify. The qualifying benefits and income limits from 1 August are:

  • child tax credit (not entitled to working tax credit) with annual income for tax credits purposes no more than £16,385;
  • child tax credit and working tax credit with annual income for tax credits no more than £7,330;
  • universal credit and earnings in the assessment period before application no more than £610;
  • income support, income-based jobseeker’s allowance or income-related employment and support allowance; or
  • asylum support from the Home office.

The Scottish Government says free school meals may be provided for families whose immigration status means they cannot get help from the government. Pension credit, which can now include a child element instead of child tax credit, is not specifically listed but local authorities have discretion to extend to other groups experiencing financial hardship.

Online training courses

We have a full range of traing courses available to book which are delivered online via the Zoom platform. These include:

To browse all the topic areas and dates visit the website.

We can also deliver a number of courses as 'in-house' online training courses for your own organisation on a date that suits. More information here.