Treasury written question – answered at on 24 April 2013.
To ask the Chancellor of the Exchequer how many people in (a) Ynys Mon, (b) Gwynedd, (c) Conwy, (d) Denbighshire, (e) Flintshire and (f) Wrexham local authority areas are claiming (i) working family tax credit and childcare tax credit change in circumstance income disregards, (ii) childcare tax credit first income threshold, (iii) childcare tax credit second income threshold, (iv) childcare tax credit baby element, (v) working family tax credit 30 hour element, (vi) working family tax credit basic element, (vii) working family tax credit single parent and couple element, (viii) working family tax credit 50-plus element and (ix) working family tax credit minimum hours for couples.
Working family tax credit was abolished in March 2003 and replaced by the current child and working tax credit system.
(i) Final tax credit entitlement for a given year is based on income in that year if that is: more than £2,500 lower than the income in the previous year; or exceeds it by more than £5,000. A year on year income fall of less than £2,500; or increase of less than £5,000 is disregarded in calculating the current years’ final tax credit entitlement, and the previous years’ income is used.
(ii-iii) The tax credit income thresholds cannot be claimed, they represent the point at which a families award begins to be tapered away. There are two income thresholds in tax credits.
Any family eligible for any element of working tax credit (WTC) can receive their full entitlement until their annual household income reaches £6,420 p.a. After this point, their tax credit entitlement is tapered away at a rate of 41 pence for each additional £1 of income beyond the threshold.
Any family eligible for child tax credit (CTC) only, can receive their full entitlement until their annual household income reaches £15,910 p.a. After this point, their tax credit entitlement is tapered away at a rate of 41 pence for each additional £1 of income beyond the threshold.
(v-vii) The table below shows the number of families in the requested regions benefitting from the WTC basic element, WTC lone parent or couple element, and the WTC 30 hour element. These figures are based on HMRC's Tax Credits National Statistics publication for December 2012. Further statistics and information can be found here:
http://www.hmrc.gov.uk/statistics/personal-tax-credits.htm#1
Number of families benefitting from certain elements of WTC | |||
Thousands | |||
(vi) WTC Basic element | (vii) WTC lone parent or couple element(1) | (v) WTC 30 hour element | |
Ynys Mon Isle of Anglesey | 3.9 | 3.4 | 2.9 |
Gwynedd Gwynedd | 7.1 | 6.0 | 5.4 |
Conwy Conwy | 6.8 | 5.8 | 4.9 |
Sir Ddinbych Denbighshire | 5.6 | 4.9 | 4.1 |
Sir y Fflint Flintshire | 8.1 | 7.0 | 6.1 |
Wrecsam Wrexham | 7.6 | 6.7 | 5.6 |
(1) The numbers in this column include people who receive either the lone parent, or the couple's element. |
(iv, viii) The baby element of child tax credit, and the 50+ return to work element of working tax credit were abolished in April 2011 and April 2012 respectively; therefore there are no current recipients. These changes were part of a package of measures reaffirming the government's commitment to making work pay. Since 2010, the government have announced successive increases in the personal allowance totalling £3,525, representing a rise of more than 50% in just four years. These changes will benefit 25.4 million individuals and provide a real terms gain of £507 to most basic rate taxpayers in 2013-14. Around 2.7 million individuals will be taken out of income tax all together by April 2014.
(ix) The hour's rules for couples claiming working tax credit changed in April 2012. A couple that is responsible for a child or young person must work at least 24 hours between them, and one adult must be working at least 16 hours. If the couple is not responsible for a child one adult must be over 25 years old and working at least 30 hours a week.
Recent figures have shown that nearly three quarters of families affected by the April 2012 change to the WTC hours rule have since reported an increase in hours worked. These data are evidence that difficult welfare reform can combine savings for the taxpayer with better incentives for people who want to work.
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