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New working hours rule for couples with children claiming Working Tax Credit

8 March 2012

Introduction

New working hours rule for couples with children claiming Working Tax Credit (Adobe Acrobat Document 30kb)

From April 6 of this year, a new and large group of people will be in the position of working for no more than unemployed benefit levels of income. From then couples with children will only be eligible for Working Tax Credit if their joint weekly hours of work are at least 24 and one of them works at least 16 hours a week. At present one of the couple needs to be working a minimum of 16 hours. Official figures show that 212,000 households, including 470,000 children, could lose the £3,870-a-year credit as a result of the change. Many will see their disposable income reduced to unemployed benefit levels or in many cases, when in-work expenses are taken into account, to below this.

CAB evidence shows that many of these people will be unable to do anything to avoid this happening to them because they are unable to increase their hours. They will face their income suddenly dropping and either being trapped on below out of work benefit levels of income or in some cases forced out of work by this move. Often they are only working part-time as their hours have been reduced because their employer is experiencing financial difficulties. Other families are in this position because one partner has lost fulltime work and the other is combining working part-time with being the main carer for the children. When their partner loses their job they are unable to increase their hours to compensate.

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