Child Benefit and Child Tax Credits - what’s the difference?

Child Benefit and Child Tax Credits - what’s the difference?

The simple difference is that Child Benefit can be paid to anyone who’s responsible for a child, it doesn’t matter how much you earn. But a Child Tax Credit (a CTC), is a means-tested benefit – so exactly how much CTC you get depends on your circumstances. Let’s explain.

Child Tax Credits

Child Tax Credit (CTC) is a strange name, because it’s not actually a credit against your taxable income. Instead, it’s a benefit that’s paid directly to you as a sum of money. As a couple, you have to make a joint CTC claim; if you’re a single parent, then whichever one of you looks after a child most is usually the one who’ll apply. 

 The great thing is, CTCs aren’t just for families on low incomes – and you don’t need to be working either. If you have up to £50,000 per year coming in as a regular income, then you can claim CTC. And if you earn more, you can also claim – but you’ll receive a lower amount. You can usually get Child Tax Credit for each child you’re responsible for if they’re under 16, or under 20 and in approved education or training. 

Child Benefit

You’ll be paid Child Benefit if you’re looking after a child who’s under 16 (or under 20 if in approved education or training). You can decide not to claim the payments, but you should still fill in the claim form – because it’ll help you get National Insurance credits that count towards your State Pension.

Only one person can claim Child Benefit for each child, but although Child Benefit isn’t means tested, you may have to pay a tax charge if you or your partner’s individual income is over £50,000 per year. You can find more information about this on the government’s web site, or via your local Citizens Advice Bureau.

Don’t forget – if you’re receiving Child Tax Credits or Child Benefit, it’s important to report any changes in your circumstances as soon as you can. The government will reclaim benefits that have been overpaid by mistake.

Useful links

Child Benefit claim form

Child Tax Credits calculator

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