Disability and tax credits
Tax credits and benefits
Working tax credit (WTC) is made up of different elements. On this page we discuss the two elements that provide additional financial support and are important for people with disabilities or long-term health problems – the disability element and the severe disability element.
There are rules about the definition of disability for tax credit purposes so even if you consider yourself disabled, you might not meet the tax credit definition of disability.
The Government is gradually introducing universal credit (UC), a new benefit which will eventually replace tax credits, and some other social security benefits. Universal credit is now available across the UK and most people are no longer able to make a brand new claim for tax credits and are expected to claim UC (or pension credit) instead. Existing tax credit claimants are expected to be moved across to universal credit between 2020 and 2023. This will follow a pilot involving up to 10,000 people who will be moved between July 2019 and July 2020. You can find out more about this in our universal credit section.
What is the disability element?
This is an element which is included in your maximum WTC award if you meet the conditions. Also, if you do not have children, qualifying for the disability element means you can claim WTC by working 16 hours a week (rather than the 30 you might normally need to work). Similarly if you have children, you can qualify for working tax credit by working 16 hours instead of 24.
How do I qualify for the disability element?
To have the disability element included in your WTC claim, you must meet all of the following three conditions for each day of your claim. If you are part of a couple, and you both individually meet all three conditions, you should have two disability elements included in your claim.
Condition 1: you must work at least 16 hours a week
If you are part of a couple, the partner who meets conditions 2 and 3 (the person with the disability) must normally work at least 16 hours a week.
If you are part of a couple and the non-disabled person is the worker, then you cannot get the disability element but you may qualify for the severe disability element (see below).
Condition 2: your disability puts you at a disadvantage in getting a job
You must have one of a number of disabilities listed in HMRC’s TC956 checklist.
Condition 3: you must be on (or have previously received) a qualifying benefit
The list of qualifying benefits is on HMRC’s TC956 checklist. Again, you only need to be getting (or previously in receipt of) one of these. If you are not sure if you meet this qualifying benefits test, you should get advice. You may end up being overpaid if you get this wrong.
How do I claim the disability element?
When you make your tax credit claim, you will be asked to say if you meet the rules. You should read the TC956 checklist carefully; make sure all three conditions apply to you before you answer.
If you do not qualify for tax credits, for example because you do not work 30 hours, but meet the rules to be able to make a brand new claim for tax credits and are waiting for disability benefit decision that would entitle you to working tax credit (with disability element) for the first time, you should claim within one month of your disability benefit award. If you do this, your claim for WTC will be backdated to the first day of your disability benefit award providing you meet all of the other WTC conditions.
If you are already getting tax credits, but think you might now qualify for disability-related elements, you need to ring HMRC's Tax Credit Helpline as soon as you are awarded your qualifying disability benefit. As long as you tell HMRC within one month of the date your disability benefit claim was decided, your claim for the WTC disability element should be backdated to the start date of your disability benefit claim. Check our backdating page for more information about this.
What is the severe disability element?
The severe disability element is an extra element added to your maximum WTC award if you meet certain conditions. You can get the severe disability element even if you do not qualify for the disability element, for instance in a joint claim, the partner with a disability is not working.
How do I qualify for the severe disability element?
To have the severe disability element included in your WTC award, you (or your partner) must be getting:
- the highest rate of disability living allowance (DLA) care component; or
- the enhanced rate daily living component of personal independence payment (PIP), or
- higher rate attendance allowance (AA)
- armed forces independence payment (AFIP).
If payment of these benefits is suspended while you are in hospital, you will still qualify for the severe disability element.
If you are part of a couple, and you both meet these conditions, you should have two severe disability elements included in your claim.
Note: there are various rates of DLA and PIP. It is only the highest rates for care or daily living that count for the severe disability element. If you are not sure which level of DLA, PIP, or AA you get, check with the DWP office paying your benefit.
How do I claim the severe disability element?
Similar to the disability element, when you make your tax credit claim, you will be asked if you meet the rules. You should read the notes carefully and make sure you qualify before you answer.
If you are already getting tax credits, but think you might now qualify for disability-related elements, you need to ring the Tax Credit Helpline as soon as you are awarded your qualifying disability benefit. As long as you tell HMRC within one month of the date your disability benefit claim was decided, your claim for this severe disability element should be backdated to the start date of your disability benefit claim. Check our backdating page for more information about this.
This section of the site gives a brief overview of the basic conditions for the disability elements of WTC. For more detailed information, visit the following pages on our website for advisers: