The basic State Retirement Pension for 2003/04 is £77.45 for a single person and £123.80 for a married couple where the
wife did not make contributions.
A new system of Tax Credits is introduced for 2003/04. It is a major change to the way in which the tax system provides support
to people with children and workers on low incomes. Tax Credits will be paid to those who claim them, and will not be an adjustment
in the tax computation.
Working Tax Credit (WTC) is paid to employed and self-employed people on low incomes. The full entitlement is given for an income of
only £5,060, and it is tapered away to nothing by the time income reaches £13,500.
There is an additional element which will cover 70% of qualifying childcare costs of up to £200pw for two children, and a couple
entitled to this can enjoy substantial credit even on incomes over £30,000.
Child Tax Credit (CTC) is paid to the main carer for children up to 16 years old, or up to 18 in full-time education. Entitlement is
built up of elements for each child, and for "the family". The child elements are tapered away as income increases. The family
element of £545 will be paid in full to couples with a combined income of up to about £50,000; after that, it will be tapered
away to nothing by the time the joint income reaches £58,000, or £66,000 in the year a child is born.
The new system is very complicated, and this can only serve as a brief summary. The Inland Revenue website
(www.inlandrevenue.gov.uk) has a ready-reckoner facility which will estimate the amount of
either tax credit due, and also has forms and details of how to apply. To claim the full entitlement from the start of the new system,
forms have to be submitted by 5 July 2003.