Government issues guidance on £500 one-off payment for working households receiving tax credits announced in Budget 2021

New guidance advises that applications are not required and payments should be made by 23 April 2021

The government has issued new guidance on the £500 one-off payment for working households receiving tax credits announced in Budget 2021.

Confirming that the new payment is being introduced to provide extra support when the temporary increase in working tax credit - that was introduced in April 2020 in response to the Covid-19 pandemic - ends as planned on 5 April 2021, the new guidance advises that -

• applications for the new payment are not required as HMRC will contact claimants by text message or letter in April 2021 to confirm eligibility;
• eligible claimants will include those who, on 2 March 2021, receive working tax credit payments; both working tax credit and child tax credit payments; or child tax credit payments where they are eligible for working tax credit but do not get a payment because their income is too high; and
• the £500 payment should be paid to eligible claimants by 23 April 2021.

For more information, see New one-off £500 payment for working households receiving tax credits from gov.uk