Below is a list of questions that are answered in this section.
Questions
I have been over/under paid Tax Credits. Does this mean I might have to pay back the additional £250 you’ve paid into my child’s Child Trust Fund (CTF) account?
Will a CTF account affect my benefits and credits?
Will the CTF affect my child’s benefits and credits when they are 18?
Answers
Q. I have been over/under paid Tax Credits. Does this mean I might have to pay back the additional £250 you’ve paid into my child’s CTF account?
A. Not usually. We only pay the additional £250 once your Tax Credits award has been finalised and you've confirmed your income for the relevant year. At that stage we know for certain whether or not your child qualifies. So even if you've been over/under paid Tax Credits during the year it doesn't affect the additional CTF payment.
The only circumstances in which we may have to take back an additional CTF payment is where there is a change to the information you gave us in connection with your Tax Credits award. In that case, the money would come out of the CTF account and not out of your Tax Credit payments.
Back to top
Q. Will a CTF account affect my benefits and credits?
A. No. The money in a CTF account will not affect family benefits and credits before the child reaches 18.
The only way in which this might affect your benefits is if there is money in the CTF account and your child dies. Then the money may belong to you and you would have to declare it as part of your assets. The normal rules for income-related benefits and Tax Credits would then apply. The threshold above which capital reduces the amount of benefit payable increased from £3,000 to £6,000 from April 2006. If you have capital above £6,000 then you may have some reduction in your benefits.
Back to top
Q. Will the CTF affect my child’s benefits and credits when they are 18?
A. It is not possible to predict the benefits and credits systems that will operate in 2020 and beyond. Under the current system, if an 18-year-old has savings from their CTF account, this could reduce the amount of means-tested benefits received depending on the amount of savings. The threshold above which capital reduces the amount of benefit payable increased from £3,000 to £6,000. This threshold will not necessarily stay the same until 2020.
Back to top
