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Tax Credits, Child Benefit and Guardian's Allowance

Volume 667: debated on Monday 4 November 2019

The Government will bring forward regulations that will increase most tax credits rates and thresholds and will increase the Child Benefit and Guardian’s Allowance rates in line with the general rise in prices as measured by the September 2019 Consumer Price Index. The annual up-rating of benefits will take place for Tax Credits, Child Benefit and Guardian’s Allowance in the first full week of the tax year. In 2020, this will be the week beginning 6 April.

The annual up-rating process takes into account a variety of measures:

The majority of working-age benefits were frozen at their 2015-16 levels for four years under the Welfare Reform and Work Act 2016. From April 2020, the majority of elements and thresholds in Working Tax Credit and Child Tax Credit will be increased by CPI (1.7%). In line with established practice and the Office for Budget Responsibility’s expectations in their welfare forecast, the maximum rate of the childcare element, the family element, the withdrawal rate and the income disregards will remain unchanged.

Child Benefit will be increased in line with CPI (1.7%) from April 2020.

As set out in legislation, Guardian’s Allowance will be uprated in line with prices, measured by CPI (1.7%).

The full list of proposed benefit and credit rates will be placed in the Libraries of both Houses in due course.