Raising children can place significant pressure on household finances. While many families now receive support through Universal Credit, Child Tax Credit continues to provide financial help for thousands of families across the United Kingdom who made successful claims before the system changed.
Many people still search online asking, “What is Child Tax Credit?” This is an important question because although new claims have largely stopped, the benefit has not disappeared. Existing claimants may continue receiving payments if their circumstances remain eligible, and understanding how the scheme works can help families avoid mistakes that could affect their income.
This guide explains everything you need to know in clear and simple language, including who can still receive Child Tax Credit, how payments are calculated, how the benefit interacts with Universal Credit, and what happens if your circumstances change.
Child Tax Credit is a UK Government benefit designed to help families with the cost of raising children. Although new applications are no longer accepted in most circumstances, many people who already receive Child Tax Credit continue to receive payments. If you need to make a new claim for financial support for children today, you will usually need to apply for Universal Credit instead.
Child Tax Credit is a means tested benefit that helps eligible families with the costs of bringing up children.
The amount a family receives depends on several factors including:
Unlike Child Benefit, Child Tax Credit was designed to provide additional financial support based on income rather than simply having children.
It was introduced by HM Revenue and Customs as part of the Tax Credits system and supported millions of families for many years.
Today, Child Tax Credit remains available only to many existing claimants because the Government has gradually replaced Tax Credits with Universal Credit.
| Feature | Details |
|---|---|
| Purpose | Help with the cost of raising children |
| Means tested | Yes |
| Administered by | HM Revenue and Customs |
| New applications | Usually closed |
| Existing claims | Can continue if eligible |
| Replacement benefit | Universal Credit |
Most people cannot make a brand new claim.
However, you may continue receiving Child Tax Credit if:
If your Tax Credit claim ends, you will generally not be able to restart it.
Instead, you would normally claim Universal Credit.
Eligibility depends on several factors.
These include:
Generally, you must be responsible for one or more children who normally live with you.
Usually the child must be:
or
You usually need to:
Child Tax Credit is income assessed.
Families with lower household incomes generally receive higher awards.
| Requirement | Usually Required |
| Responsible for a child | Yes |
| Child lives with you | Yes |
| Income assessed | Yes |
| UK residence | Usually |
| New claims allowed | Usually No |
Yes.
Your annual household income is one of the biggest factors affecting your award.
HM Revenue and Customs considers:
As household income increases, Child Tax Credit generally reduces.
Families with lower incomes often receive higher awards.
Each year your award may be adjusted if your income changes significantly.
It is therefore important to report changes promptly.
| Change | Possible Effect |
| Income increases | Payments may reduce |
| Income decreases | Payments may increase |
| One partner stops work | Award may increase |
| New employment | Award may reduce |
Unlike Universal Credit, there is no fixed savings limit that automatically prevents someone receiving Child Tax Credit.
However:
Savings themselves may generate taxable income.
Certain investment income can affect your overall household income calculation.
This means savings can indirectly influence the amount you receive if they increase your taxable income.
Many people are surprised by this difference because Universal Credit includes capital limits whereas Child Tax Credit does not operate in exactly the same way.
There is no single payment amount.
Awards depend on:
The calculation includes different elements which are added together before income adjustments are made.
Some families receive only a small amount.
Others receive considerably more depending on their circumstances.
| Situation | Possible Outcome |
| More children | Higher award |
| Lower household income | Higher award |
| Disabled child | Additional support |
| Income falls | Award may increase |
The calculation begins with the maximum amount your household could receive.
The Government then considers your annual income.
If your income exceeds certain thresholds, your award gradually reduces.
The calculation can become more complex where families have:
For this reason, annual award notices should always be checked carefully.
In most situations, no.
New claims for Child Tax Credit have now been replaced by Universal Credit.
If you need financial support today and are not already receiving Child Tax Credit, you will usually need to claim Universal Credit.
Existing Child Tax Credit claimants should continue following HM Revenue and Customs guidance unless instructed otherwise.
Never voluntarily close an existing Child Tax Credit claim without understanding how it may affect your future entitlement.
If you already receive Child Tax Credit, you may need documents when reporting changes or renewing information.
Useful documents include:
Keeping documents organised can help prevent payment delays.
You should report important changes as soon as possible.
Examples include:
Reporting changes promptly helps avoid overpayments.
Many overpayments happen because changes are reported late.
Common mistakes include:
Checking your award regularly can reduce the risk of unexpected repayment requests.
Sarah has one child and has received Child Tax Credit for several years.
She changes jobs and earns more money.
She informs HM Revenue and Customs promptly.
Her award reduces slightly but she avoids building up an overpayment.
James separates from his partner.
The children begin living with their mother.
Responsibility for the children changes.
His Child Tax Credit entitlement changes because he is no longer the main carer.
Rebecca already receives Child Tax Credit.
Her daughter remains in approved full time education after age sixteen.
She reports this correctly.
Payments continue because the child still meets the qualifying conditions.
Mark decides to end his Child Tax Credit claim because he believes he can restart it later.
After closing the claim, he discovers new applications are no longer accepted.
He must instead claim Universal Credit.
This highlights why claimants should always seek advice before ending an existing award.
| Child Tax Credit | Universal Credit |
| Existing claims mainly continue | Open for new claims |
| Managed by HM Revenue and Customs | Managed by Department for Work and Pensions |
| Supports children | Supports wider living costs |
| No fixed capital limit in the same way | Savings rules apply |
| Being replaced gradually | Main working age benefit |
Existing claimants may still receive it, but new claims are usually not accepted.
Most people will instead need to apply for Universal Credit.
No. Payments are generally not taxable.
They are separate benefits, although information about your children is relevant to both.
Many existing claimants continue receiving both if they meet the eligibility conditions.
Your Child Tax Credit award may increase or decrease depending on the change.
There is no simple savings limit like Universal Credit, but income generated from savings can affect your award.
Your Child Tax Credit usually ends and cannot normally be restarted.
You should report the change promptly because it may affect your entitlement.
Usually only the person mainly responsible for the child can claim.
Depending on your circumstances, you may also qualify for:
Many families qualify for more than one form of support.
Checking your full entitlement regularly can make a significant difference to your household finances.
Information reviewed against current UK Government guidance and official sources.
Useful official resources include:
Always rely on official guidance if your circumstances change or before making decisions that could affect your benefits.
| Question | Answer |
| What is Child Tax Credit? | Financial support for eligible families with children |
| Can new claims be made? | Usually No |
| Who administers it? | HM Revenue and Customs |
| Is income considered? | Yes |
| Can existing claimants continue? | Usually Yes if eligibility continues |
| Replacement benefit | Universal Credit |
Child Tax Credit has supported millions of families across the United Kingdom by helping with the costs of raising children. Although the benefit has largely been replaced by Universal Credit for new applicants, many existing claimants continue receiving payments and should understand how changes to income or family circumstances may affect their entitlement.
Knowing how Child Tax Credit works can help you avoid common mistakes, protect your payments and ensure you receive the support you are entitled to. Reporting changes promptly, checking award notices carefully and staying informed about Government guidance remain essential.
Benefits Advice UK provides free information to help people better understand the UK benefits system. Always check the latest Government guidance before making financial decisions.
Information on this site is based on official UK guidance.
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