# Working Tax Credit (WTC) Definition

## What Is the Working Tax Credit (WTC)?

The Working Tax Credit (WTC) is a state benefit offered to individuals living in the United Kingdom who work and have a low income. It was introduced in April 2003 as a means-tested benefit, a central part of the [welfare state](https://www.investopedia.com/terms/w/welfare-state.asp) in the United Kingdom. A means-tested benefit is a payment available to people who demonstrate that their income and capital are below specified limits.

### Key Takeaways

*   The Working Tax Credit (WTC) is a state benefit offered to individuals living in the United Kingdom who work and have a low income.
*   You must already be receiving the Child Tax Credit to qualify for the WTC.
*   The Working Tax Credit (WTC) is available for individuals aged 25 and above or with a qualifying disability.  
    
*   Applicants must be gainfully employed and working a minimum number of hours required each week, as determined by the applicant’s age.

## How the Working Tax Credit (WTC) Works

You are only eligible for the WTC if you already receive the Child Tax Credit. The Working Tax Credit (WTC) is available for individuals aged 25 and above or with a qualifying [disability](https://www.investopedia.com/terms/d/disability-insurance.asp). Applicants must be gainfully employed and working a minimum number of hours required each week, as determined by the applicant’s age.  

## WTC Qualifications

To qualify, you must work a certain number of hours depending on your age and fulfill other requirements, as seen here.

What counts as work is broad. It includes work for someone else as an employee or worker, someone who is self-employed, or a combination of both. If you are [self-employed](https://www.investopedia.com/terms/s/self-employed-person.asp), the work must have the goal of making a profit, and be commercial, regular, and organized.

## WTC Payments

The WTC base can pay out £2,280 annually, with additional qualifications bringing that figure up or down. Here is what you can receive based on specific circumstances.

Eligible individuals will receive payments directly into their bank account or building society account every week or every four weeks. Typically, you will be paid from the point you made your first claim to the end of the tax year.

> **Important**
>
> If citizens are not eligible to claim the WTC, they need to pursue the Universal Credit instead. The Universal Credit has been set up to replace several of the existing credits in the United Kingdom.

## Welfare Programs in the U.S.

Public Welfare is a common term for public assistance in the United States. People are said to be receiving [welfare](https://www.investopedia.com/terms/w/welfare.asp) or assistance when they are in receipt of a variety of government subsidies or benefits.

These payments can range from federally-funded initiatives like Social Security payments and the [Supplemental Nutrition Assistance Program](https://www.investopedia.com/supplemental-nutrition-assistance-program-snap-5187718) (SNAP) to state-sponsored programs. While only the Public Welfare program goes by that name, most of these programs are considered types of assistance programs because they are put in place to assist those who need them either temporarily or on a long-term basis.

Many of these programs are paid for by a combination of taxes that are withheld from taxpayer paychecks. Programs like [Social Security](https://www.investopedia.com/terms/s/socialsecurity.asp) are directly paid into by each individual taxpayer, while some other programs receive funding from other broader taxes.

These subsidies aren’t entirely without cost to the recipient. Some require applicants to attend classes or apply to a certain number of jobs a week. In the case of [Social Security and Disability benefits](https://www.investopedia.com/terms/s/social-security-benefits.asp), a portion of the payment may be taxable, depending on income limitations.

Each assistance program has its own guidelines and qualifications. Anyone looking for additional information on whether they qualify for state or federal aid should consult the federal website for that specific program.

## Who Gets the Working Tax Credit in the U.K.?

The Working Tax Credit (WTC) in the U.K. seeks to provide monetary support to low-income individuals. To receive the credit, one must meet different qualifications, such as already receiving the Child Tax Credit, being of a certain age and correspondingly working a certain number of hours, or if you are disabled, also working a certain number of hours. Your type of employment must also meet the required qualifications.

## What Is the Income Limit for the Working Tax Credit in the U.K.?

There is no income limit for the Working Tax Credit in the U.K. To be eligible and what you receive depends on a variety of qualifications, but there is no income limit to determine if and what you will receive as a credit.

## How Often Is the Working Tax Credit Paid in the U.K.?

The working tax credit in the U.K. is paid either every week or every four weeks. You will be paid from the time you file your first claim to the end of the tax year.

## The Bottom Line

The Working Tax Credit (WTC) in the U.K. seeks to assist individuals working with low income and who already receive the Child Tax Credit. For those who do not qualify, the U.K. does provide the Universal Credit. The programs are welfare programs that seek to improve the quality of living for a certain segment of the population.  

> **Article Sources**
>
> 1.  Revenue Benefits.org. "[Working Tax Credit and Labour Supply: Treasury Economic Working Paper No. 3](https://revenuebenefits.org.uk/pdf/wtc_and__labour_supply_2008.pdf)," Page 3.
>     
> 2.  Gov.UK. "[Working Tax Credit](https://www.gov.uk/working-tax-credit)."
>     
> 3.  Gov.UK. "[Working Tax Credit. What You'll Get](https://www.gov.uk/working-tax-credit/what-youll-get)."
>     
> 4.  Gov.UK. "[Universal Credit](https://www.gov.uk/universal-credit)."
>     
> 5.  Social Security Administration. "[How Is Social Security Financed?](https://www.ssa.gov/news/press/factsheets/HowAreSocialSecurity.htm)"
>     
> 6.  United States Department of Labor. "[State Unemployment Insurance Benefits](https://oui.doleta.gov/unemploy/uifactsheet.asp)."
>     
> 7.  Social Security Administration. "[Income Taxes And Your Social Security Benefit](https://www.ssa.gov/planners/taxes.html)."