Is Child Tax Credit the Same as Child Benefit?
In the UK, many families rely on government support to help manage the costs of raising children. Two common terms often heard are Child Benefit and Child Tax Credit, but these are not the same.
While both aim to ease the financial pressure on families, their eligibility, purpose and structure are very different.
Understanding these differences is essential for parents, carers and guardians to make informed decisions about which support they may qualify for. This guide breaks it down simply and clearly.
What Types of Financial Support Are Available for Children in the UK?
Parents and guardians in the UK may be eligible for various financial support schemes provided by the government to help raise their children.
These schemes include Child Benefit, Child Tax Credit, and Universal Credit. Each of these has different eligibility rules and payment methods.
- Child Benefit is a universal, non-means-tested payment for individuals responsible for a child under the age of 16, or under 20 if in full-time education.
- Child Tax Credit is a means-tested benefit that supports low-income families. It provides additional financial help based on income and the number of children in a household.
- Universal Credit is replacing Child Tax Credit for new applicants and combines several benefits into one monthly payment.
Together, these support schemes aim to ease the financial burden of raising children and ensure families receive the help they need.
What Is Child Tax Credit and How Does It Work?
Child Tax Credit is a benefit designed to provide extra financial support to families with children. It is a means-tested payment, which means it depends on the family’s income and circumstances. To qualify, a family must be already claiming Working Tax Credit or have done so in the past year.
Payments are made per family, not per child. This means the family receives a set amount that reflects the number of children, but the claim is tied to the family unit rather than individual children.
The benefit is paid until 31 August after a child turns 16, and can continue if the child is in full-time, non-advanced education or approved training.
As of 2024–25, families may receive different amounts depending on the child’s condition or any disabilities.
Why Do People Confuse Child Tax Credit with Child Benefit?
The confusion between Child Tax Credit and Child Benefit often stems from their similar names and shared goal of supporting families with children. However, these are distinct benefits with different eligibility criteria and payment structures.
Here’s why they’re often mixed up:
- Similar Purpose: Both are designed to support families with children
- Paid by HMRC: Both are administered by the same government body
- Overlapping Age Eligibility: Children up to 16 or 20 in education can qualify under both schemes
- Can Be Claimed Together: Families often receive both at the same time
Despite these overlaps, they serve different financial functions. Child Benefit is available to almost every family regardless of income, whereas Child Tax Credit is only available based on income and limited circumstances.
Families also make claims differently, Child Benefit is typically automatic once a child is born, while Child Tax Credit requires more detailed application and assessment.
Is Child Tax Credit the Same as Child Benefit?
No, Child Tax Credit is not the same as Child Benefit. They are separate government support schemes with different eligibility rules, purposes and methods of payment.
Child Benefit is a universal allowance paid per child and not influenced by the family’s income unless it exceeds £60,000. In contrast, Child Tax Credit is a means-tested benefit that supports families on lower incomes, calculated based on household income and other factors.
Both benefits can be received at the same time, but they operate independently and should not be seen as interchangeable.
Key Differences Between Child Benefit and Child Tax Credit
Child Benefit and Child Tax Credit serve different roles and follow different eligibility rules. Below is a side-by-side comparison to highlight the key distinctions:
| Feature | Child Benefit | Child Tax Credit |
| Type of Benefit | Universal | Means-tested |
| Who It’s Paid For | Each child | Per family |
| Income Restrictions | Not affected unless income > £60,000 | Reduces as income increases |
| Eligibility | All families with children under 16/20 | Families with low income & tax credit history |
| Taxable | No | No |
| Affected by Universal Credit | No | Yes – being replaced |
| Payment Frequency | Usually every 4 weeks | Weekly or 4-weekly |
Understanding these core differences ensures that families know what to expect and how to claim what they are entitled to.
How Are Child Benefit and Child Tax Credit Generally Used by Families?
Both Child Benefit and Child Tax Credit are used to ease the financial burden of raising children, especially during times of economic uncertainty or inflation. However, their usage may vary depending on family structure, income and needs.
How Families Use Child Benefit?
- School uniforms and supplies
- Baby items like nappies and formula
- Weekly food shopping
- Transport to and from school
How Families Use Child Tax Credit?
- Childcare costs
- Extra educational support
- Rent or housing-related bills
- Medical or disability-related costs (where applicable)
These payments provide a reliable source of additional income, helping families manage daily expenses and long-term planning for their children’s development and wellbeing.
Who Can Receive Child Tax Credit in 2024-25?
Eligibility for Child Tax Credit in 2024–25 is limited due to the ongoing rollout of Universal Credit. However, certain families still qualify if they are already receiving Working Tax Credit or have claimed Child Tax Credit in the past tax year.
You may be eligible if:
- You are already on Working Tax Credit
- You’re responsible for at least one child under 16 (or under 20 in education/training)
- Your income is below £19,995 for maximum entitlement
- Your child meets the education or training requirements
- You have two or fewer children (due to the two-child limit for children born after 6 April 2017)
Additional amounts may apply if:
- Your child is disabled (disability or severe disability element)
- You’re a single-parent household
Payments are made based on your income, number of children, and any disability-related costs.
Can You Claim Both Child Tax Credit and Child Benefit at the Same Time?
Yes, families can receive both the Child Tax Credit and the Child Benefit at the same time. These are separate benefits with independent qualifying rules, and claiming one does not disqualify you from receiving the other.
Many families in the UK do just that, claim Child Benefit as a standard entitlement and Child Tax Credit based on financial need.
Key points to remember:
- Claims must be made separately
- Eligibility for one does not guarantee eligibility for the other
- Always update HMRC with any changes to your family situation
By understanding these rules, families can make the most of the financial support available to them.
What Should Families Know About Changes, in Circumstances?
Changes in a family’s situation can affect benefit entitlement. It is crucial to inform HMRC immediately when certain life events occur, as failing to do so can result in overpayments or missed benefits.
When You Must Report Changes?
- Adding a new child to the family
- A child turning 16 or leaving education/training
- Changes in your income or working hours
- You stop being responsible for a child
- A child moves out of the UK or passes away
Why It Matters?
- Ensures correct benefit calculation
- Avoids overpayments and debts
- Keeps your entitlements current
HMRC regularly updates systems based on family changes, so accurate reporting helps you stay within legal and financial guidelines.
Conclusion
Understanding the difference between Child Benefit and Child Tax Credit is key to managing family finances in the UK. While they might appear similar, they serve distinct purposes and follow different eligibility rules.
With Child Tax Credit being phased out in favour of Universal Credit, it’s even more important for families to stay informed and updated.
By knowing what you qualify for and reporting changes promptly, you ensure your family gets the support it needs.
Frequently Asked Questions
Does universal credit replace child tax credit?
Yes, Universal Credit is gradually replacing Child Tax Credit for new applicants, combining multiple benefits into one monthly payment.
Is child benefit affected by my income?
Only if your income is over £60,000; a High Income Child Benefit Charge applies in such cases.
What happens if I miss a child tax credit renewal?
You may lose your payments or face overpayments, so it’s crucial to renew on time annually.
Is there a deadline to claim child benefit?
You can claim anytime, but it’s best to claim within three months of your child’s birth to get full backdated payments.
How do I know if I’m still eligible for child tax credit?
You can check your eligibility by logging into your HMRC account or contacting the tax credit helpline directly.
Does child benefit count as income for other benefits?
No, child benefit is not counted as income when applying for other means-tested benefits.
Can child benefit be paid weekly?
Yes, although most receive it every four weeks, single parents or those on certain benefits can request weekly payments.
Also Read:
