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Family Tax

Amendments have been made to the Working Families` Tax Credit (WFTC) to enhance the benefits available to lower income families. To recap, WFTC

■ replaces Family Credit.

■ it guarantees working families a minimum income above and beyond the minimum wage.

The Chancellor has now announced the following measures in his Budget

– the credit for children under 16 in the Working Families&#39 and Disabled Person&#39s Tax Credits is to rise from June 2000 by £4.35 a week. This is in addition to the £1.10 real terms increase in the credit for children aged under 11 and the uprating for indexation already planned in April. Working Families&#39 Tax Credit will guarantee a family with one child and someone working full-time a minimum income of £207 a week from June;

– the Children&#39s Tax Credit is also to rise to £442 a year from its introduction in April 2001.

From April 2001, the minimum guaranteed income for a family with one child and

someone working full-time will be £214 a week.

More help is to be directed at families when a baby is born, with a package of tax credit reforms to give mothers more choice about their return to work:

– from May 2001, entitlement to Working Families&#39 and the Disabled Person&#39s Tax Credits will be re-assessed as soon as a child is born, to reflect the change in circumstances straight away; and,

– so that all families can benefit from this change, a woman who previously worked at least 16 hours a week and receives Statutory Maternity Pay or Maternity Allowance will be treated as meeting the work test for tax credits.

The reforms mean that these families could be up to £30 a week better off in the critical first weeks of a child&#39s life.


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Life Cover

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