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Newsroom & speeches
162/99
05 October 1999
Almost 12,000 families a day are applying for the new Working Families Tax Credit Chancellor Gordon Brown said today, as he kicked off the first regional WFTC roadshow.
Speaking in London on the day that WFTC comes into force, the Chancellor told delegates that, to date, the WFTC advertising campaign has resulted in the biggest response to a Government advertising campaign ever, with almost 350,000 enquiries from the public and 140,000 information packs sent out.
The Chancellor said:
"Today sees the biggest change in the tax and benefits system for over half a century. The Working Families Tax Credit means that for the first time, a life in work pays more than a life on benefits. Working families will no longer have to apply to the social security office to take home a living wage.
"Simply compensating people for their poverty through benefits is not enough. Our task must be to deal with the causes of poverty, by tackling the poverty and unemployment traps that prevent work paying. With the introduction of WFTC, we are making work pay, ensuring that no family with a full-time worker will take home less than £200 a week. On average, the 1.5 million families receiving WFTC will get £24 a week more than before. And around 3 million children will benefit.
"Our campaign is now entering a new phase, focusing on the unemployed. Today I am calling on the country's unemployed to take up the economy's one million vacancies. The number of vacancies shows clearly there is now no excuse for those who can work not to work. Our policy is new opportunities and new responsibilities together. WFTC now gives people the chance to go back to work, receive a decent income, and provide their children with the best possible start in life."
The Government's advertising campaign was launched on 7 September and will run until November. A response line - 0800 597 5976 - for further information is open from 7am until 11pm every day. Further information on WFTC is attached.
What is Working Families Tax Credit?
A new Government initiative to give working families - either single parents or couples - a better deal. It replaces Family Credit, giving families a 'top-up' to their pay which will provide them with a decent living wage.
Why is the Government bringing WFTC in?
Parents can face many problems when moving into work or when trying to stay in work. Some parents feel they can't afford to work because of the costs of childcare. Others feel that benefits are worth more than taking a job. WFTC will change all that - it actually makes work pay. It will be an incentive to people to get into work and onto the jobs ladder.
What makes it so different from Family Credit?
It is far more generous, and is paid as a 'tax credit' - so people don't need to go to a benefits office to apply for it. The Inland Revenue, and not the DSS, will be administering the tax credit. One other major difference is that WFTC is far more generous with help for childcare costs.
Why is the Inland Revenue involved? They normally take money away, not hand it out.
The new system is a tax credit - not a benefit - and so it makes sense for the Inland Revenue to be responsible for it. As it's paid through the wage packet, more people are likely to claim it, and will be less likely to feel like they're getting a benefit hand-out.
When does it come into force?
From October 5 this year. The advertising campaign launched in September gives information about the new system, with a freephone telephone number for people to ring for further information. The number is 0800 597 5976.
How do I know if I'm eligible?
You're eligible for WFTC if:
How much money will I get?
The amount of WFTC that you will get depends on your circumstances eg. your income, the number of hours you work each week, the number and ages of your children, and how much you pay in childcare. The Inland Revenue will work it out for you.
Can you give me any examples?
Any family with a full-time worker will be guaranteed a take-home pay of at least £200 a week - that's £10,000 a year. No family with an income of less than £235 will pay income tax.
How can I find out if I'm eligible?
You can ring the freephone number - 0800 597 5976 - to find out if your eligible and to be sent application forms. The Inland Revenue will do the rest. For more general information and advice, phone the Tax Credit Helpline on 0845 609 5000.
I already get Family Credit - can I still apply for WFTC?
About a month before your current Family Credit award ends, you will be automatically sent an application for WFTC.
If I apply, will my husband automatically get the money?
No. Couples entitled to WFTC will have a choice about which partner should receive the tax credit, regardless of whether one or both partners work.
I get maintenance payments. Will these be taken into account?
No. Neither Child Benefit nor maintenance payments are counted as income when WFTC is calculated.
What about the cost of childcare?
You'll get help with this, too. If you pay for registered childcare, the childcare tax credit within WFTC will provide up to £70 a week for one child and £105 a week for two or more children.
The childcare tax credit is available to help with the cost of paid childcare provided by registered child minders, nurseries, play schemes or out-of-school clubs.
I'm separated from my partner but we share care of the kids - will the money for childcare be split between us?
No. Only the parent claiming WFTC will be able to claim the childcare tax credit.
Are there age limits on childcare?
Children will qualify up to the September after the child's 15th birthday. Disabled children will qualify up to the September after their 16th birthday.
How will WFTC be paid to me?
Initially, it will be paid into your bank or building society, or by Order Book which you can cash weekly at the Post Office. From April next year, WFTC can be paid along with your wages.
Does this mean my employer will know all my private details?
No. They will only get the relevant information from the Inland Revenue on how much money you are eligible for.
I'm self-employed. Can I claim WFTC?
Yes. The Inland Revenue will give you any information and help you need when applying.
