The government has faced growing criticism over its plans to reform the current tax credits system.
While critics argue that the cuts to tax credits will see families worse off, the government says the "necessary" reforms will make work pay.
On November 25, Chancellor George Osborne will set out his reform plans in his Autumn Speech.
Here is a run down of what you need to know about the changes:
What are tax credits?
Tax credits are benefits designed to help families and people on lower incomes.
People do not actually need to be paying tax to receive tax credits, and the average claim amounts to £6,340 a year.
They come in two forms:
- Working tax credit
Cash paid to people over 25, based on an assessment of their personal circumstances.
Claiming working tax credit is also dependent on the claimants working a minimum number of hours per week (30 hours for a single, able-bodied person aged 25 to 59).
The amount also varies according to whether the person, or people, claiming have children or have a disability.
More information on how your circumstances might affect how much you can claim and how to do so can be found on the Money Advice Service website.
- Child tax credits
Cash paid to families for each child up to the age of 16; or age 20 if they are in education.
At present, families can claim up to £2,780 for each child - with additional payments available for parents with disabled children.
Like working tax credit, the amount that can be claimed is dependent on a family's circumstances.
More detailed information on how much you can claim and how to do so can be found on the Money Advice Service website.
What is changing?
The Chancellor has cut in half the amount you can earn before your working tax credit starts to "taper" (reduce) - down from £6,420 to £3,850 from April 2016.
The rate at which at which those payments are cut is also going to be sped up. Currently for every £1 claimants earn above the threshold, they lose 41p. From April for every pound earned above the threshold, claimants will lose 48p.
On child tax credit, families will only be able to claim for two children from April 2017, while the flat £545 "family element" paid before the amount for each child will also be removed completely.
This will only apply to third and subsequent children born after April 2017, however, and those who have been receiving tax credits of Universal Credit with less than six months' interruption will not face the restriction.
Why is it changing?
The government says it wants to change the confusing "merry-go-round" which sees the public pay taxes, then receive them back in credits. More fundamentally, it is keen to cut the country's huge welfare bill.
It adds that its increase in the minimum wage to a National Living Wage, a rise in the threshold for income tax to £11,000 and its promise of additional free childcare will compensate for the welfare cuts.
Will people be worse off?
The Treasury says the "fair and necessary" reforms will take tax credit spending back only to 2008 levels, with most working households better off once all welfare reforms have come into force by 2017.
However, independent analysis from the Institute for Fiscal Studies (IFS) suggests that families with someone in paid work will lose out on average £550 per year after all the changes to taxes, tax credits and benefits are factored in.
Who will be worst hit?
According to the IFS, people in households where no-one works will be especially hard hit by the changes, as they will lose out on income while seeing no benefit from the increase in the minimum wage.
However, think-tank Resolution Foundation claimed working mothers would be worst hit - accounting for 70% of money saved by the Treasury.
It said one million single parents would be £1,000 a year worse off, while 1.5 million married mothers would lose out by £600 a year.
It also claims that the changes in this summer's Budget are likely to push an additional 200,000 poorer families into working poverty by the end of this parliament in 2020. Working poverty is defined as having an income lower than 60% of median household income.
Meanwhile union Unison claims that 2.7 million low to middle income working families will be "significantly" hit, along with their 5.2 million dependent children.
Its research, based on HM Revenue and Customs figures, says 357,000 working families in London will be hurt by the changes, with the West Midlands (269,000) and Yorkshire and the Humber (255,000) following next.