The British tax credit system has dragged millions of families above the poverty line. It’s helped those who have children or those who are disabled to get back into work successfully, by providing a platform to support them when unemployed and then again when they find work.

Despite that, there is a negative view of the credit system for many people. They view these credits, which cost taxpayers an estimated £30bn in 2015-2016, as a handout, and argue that there are many who should not receive them.

They might point to the fact that the Government wants – or perhaps needs – to find a further £12bn in savings to balance the books by 2017-18, which looks fairly unlikely at this stage. Previous votes to cut credits have been overturned, so it seems we are in a status quo.

The Guardian provided its response to a recent example of some of the issues associated with benefits as a whole, when TV host Philip Schofield criticised a woman who had spent some of her benefit money on Prosecco for Christmas.

Even the title of ‘working tax credits’ is confusing, since the benefit does not depend on whether you pay tax or not. The BBC describes tax credits as ‘a means of redistributing income by paying money to a) families raising children and b) working people on low incomes.’

The Working Tax Credit is a payment for people on low income, and used to complement salary from their existing employment. An applicant will be means-tested, and if they fulfil certain criteria they may be eligible for the ‘basic amount’ of £1,960 a year.

But as well as age and existing income, the eligibility will also depend on the number of hours a week; it’s usually over 30 for most people, but for those with children it could be 16 hours a week, or 24 hours in total as a couple.

There are also a number of other factors that could mean applicants would get an additional amount, on top of the £1,960 basic working tax credit. These factors are broken down into ‘elements’; as an example, anyone who is disabled might be eligible for the ‘disability element’, which would give them an additional £2,970 per year. Other elements include the ‘severe disability’ element, and the childcare element, which could pay up to 70% of childcare costs.

The other form of credit is child tax credit – and you do not need to be working for this one. As the name suggests, the credit financially helps those who are parents and are responsible for children under the age of 16, or under 20 and in full time education or training.

Again, these credits are split into a ‘basic amount’ (known as the family element) of £545 a year, with a number of circumstance-based additional elements. You may receive up to £2,780 per child, with additional amounts for disabled and severely disabled children.

As you can imagine, it’s entirely normal to go from one of these credits to the other, should you go from unemployment to working or vice versa. As your circumstances change, so might the amount you receive, and the easiest way of finding out what you might expect is to use an online calculator or get in touch with HMRC to apply, or appeal a decision against you. Apply as soon as you can to prevent missing out; it could make life a lot better.