Child Tax credits - how do they work?

My husband and I have been awarded a small amount of child tax credits, for my son - our joint household income is quite close to the upper eligible limit, so naturally we weren't sure whether we would be awarded anything - we both work full time.

My sister in law on the other hand works 24 man hours a week, she's a single parent and on a low income (she earns below the personal income tax allowance), and I do know that she gets assistance with her rent - but as to any other "benefit" I do not know, yet she hasn't been awarded as much Child Tax Credit as we get. When she tried to up her hours to 30 a week, found that she was worse off as the deduction in tax credit was MORE than she was earning in increased wages!

She says she's queried this several times and has been assured that this is correct - but I really don't understand the system! My husband says that for her to receive "tax credit" surely she needs to be paying tax!

Can any one please clear this up for me?