The Child Tax Credit (CTC) was introduced to integrate the income tax relief previously provided by the Children’s Tax Credit with the child-related elements of other State benefits.

According to the Inland Revenue, nine out of ten families are eligible for the CTC, which replaced the Children’s Tax Credit in April 2003. The benefit is paid directly to the main carer where the family has a joint income of up to £58,000 (or £66,000 if there is a child who is less than one year old). You have to claim this benefit from the Inland Revenue, but claims cannot be backdated more than three months.

Families with an income of at least £50,000 are only eligible for the family element of CTC (up to £545 a year), which doubles during the first year after a baby’s birth. The payment is reduced by £1 for every £15 of income over £50,000.

If your family income is less than £50,000, you could receive additional benefits. These benefits start to be withdrawn gradually where the family income is more than £5,060 (where Working Tax Credit can be claimed), but some families could receive payments at relatively high levels of income, depending on their circumstances.

(article dated 1/11/03)