Increases to Tax Credits and Benefits

Child Benefit is raised in line with inflation, by 65p for the eldest or only child to £18.10 for 2007-08. The child element of Child Tax Credit (CTC) increases in line with average earnings. The disabled child element and severely disabled elements rise with inflation.

The family element (normal and baby addition) remains frozen at £545 per year. The income threshold for CTC only rises to £14,495 per year. The income threshold for CTC family element only remains at £50,000 per year.

The maximum eligible childcare costs remains at £175 for one child and £300 for two or more children. The percentage of eligible childcare costs remains at 80%.

The disregard in Tax Credits for increases in income between one tax year and the next remains at £25,000.

Back to Pre-Budget 2006