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The system of support provided by CTC and WTC is designed to deliver:

• A secure stream of income for families with children which does not depend on the employment status of the parents, creating a stable income bridge when families move into work;
• Help to tackle poor work incentives and persistent poverty among working people;
• A system in which all support for children is paid direct to the main carer - usually the mother - in line with Child Benefit;
• A common framework for assessment, so that all families are part of the same system;
• An annual system, under which awards run in line with the tax year;
• A modern income test, which brings the definition of income for tax credits more closely into line with tax; and
• A responsive system, in which a family鈥檚 tax credit award can be adjusted to reflect changes in a family鈥檚 income and circumstances.

The system will respond to falls in income in the current tax year, compared with last tax year in excess of 拢2,500 and responds to rises in income of more than 拢2,500, so that recipients do not see their tax credit for the current tax year reduce or increase as soon as their income rises or falls, respectively.