Feeling the benefits

If you feel confused by the seemingly ever-changing range of state benefits and tax credits due to families with children, you're not alone. Many parents miss out each year on benefits to which they are entitled because they fail to claim them, often through ignorance of their existence or as a result of confusion surrounding them.

Yet, raising children can be very expensive and often it's a matter of every penny counts. Read on for a brief summary of different forms of help to which you may be entitled - and how to go about getting your hands on it.

Child benefit (CB)

This is a non-means-tested benefit, paid at the same rate to all families with children, regardless of your level of income or the number of hours you work.

Rates are currently ?16.05 per week for the first child and ?10.75 for each subsequent child. It's important that you claim child benefit as soon as you can after registering each child's birth as there's normally a three-month limit on backdated claims. You will need the birth or adoption certificate to make a claim.

You can get claim forms from any benefits agency (DSS) office or by calling the child benefit helpline on 0845 302 1444 .

Child tax credit (CTC)

Nine out of 10 families with children are entitled to the new child tax credit, which combines all previous means-tested, income-related support for children into a single payment made direct to the main carer, usually the mother. It is paid on top of universal child benefit.

CTC integrates and replaces the child elements of the now defunct working families tax credit, the children's tax credit, the disabled person's tax credit and income support or jobseeker's allowance.

CTC is payable to all families with incomes of up to ?58,000 (?66,000 in the first year of a child's life). There are no work conditions attached to CTC. The amount paid is assessed purely on the basis of the family income for the previous tax year.

'Family' can mean an individual or a married or cohabiting couple and you can choose whether to receive payments weekly or every four weeks.

This benefit comprises a family element paid at a maximum rate of ?10.40 a week plus a child element paid at a maximum weekly rate of ?27.75 per child.

Families with an annual income of less than ?13,000 get the maximum CTC. Combined with child benefit, this gives them ?54.05 a week for the first child and ?38.20 for each subsequent child. Families with a new baby receive a higher rate of CTC, which is paid in the year following the child's birth.

For families on incomes of more than ?13,000, the level of CTC payment tapers away gradually, disappearing for those on ?58,000 or more. A family with children on an income of ?50,000 a year, for example, would be eligible for CTC of ?10.40 a week or ?545 a year.

The guidance notes issued with the CTC claim form explain in detail what counts as income.

Working tax credit (WTC) including childcare tax credit

If you are working and on a low income, you may be entitled to the new working tax credit. Claimants with children must be over 16 and working 16 hours or more a week.

Paid through the PAYE system, the basic element of WTC is worth ?1,520 a year and is paid in full to people on an income of up to ?5,060 a year, after which it begins to taper away.

WTC also includes a childcare element, payable alongside the child tax credit directly to the person who is primarily responsible for caring for the child or children, to households earning up to ?30,000 who have to spend money on childcare.

If you think there's a chance you are eligible for tax credits, do make an immediate claim as payments are only backdated for a limited time. Advice and claim forms are available from any tax office, at Inlandrevenue.gov.uk, or by calling freephone 0800 500 222.

Delays

The Inland Revenue has admitted that inadequate computer systems and administrative errors have led to the delay of tax credit payments to thousands of people, causing financial hardship and stress for their families.

If you feel you have lost out and want to seek compensation, write to: The Director, Tax Credits Office, Cop Lane, Preston, PR1 0SB (or at Dorchester House, 52-58 Great Victoria Street, Belfast BT2 7WF if you live in Northern Ireland). Quote your national insurance number (and that of your partner, if you have claimed tax credits jointly).

Say when you first submitted your form (an approximate date will do) and what the delay has meant to you and your family in terms of: financial hardship: the need to borrow money; lost earnings (or income for self-employed people) and costs in trying to get through to the tax credit helpline or in visiting a tax office. Indicate the worry and distress you've been caused over the whole episode and then ask for compensation.