CPAG is the leading charity campaigning for the abolition of child poverty in the UK and for a better deal for low-income families and children.   Tax credits project  Tax credits factsheets Training courses FREE tax credits training for Local Authorities Publications Online services Donate Join CPAG CPAG home Contact us          This project is funded by the Scottish Government	CPAG in Scotland Tax Credits E-Bulletin December 2009 Dear Colleague, Welcome to the December 2009 edition of CPAG in Scotland's tax credits e-bulletin keeping you up-to-date with tax credits news and developments. Contents CPAG in Scotland news and events             - Tax credits training    Tax credits news             - Pre-Budget Report             - Tax credits rates from April 2010             - Recovery of tax credits overpayments from benefits             CPAG in Scotland news and events Tax credits training  We still have some places available on our forthcoming tax credits courses in January: Tax credits - calculating awards  14 January 2010, Glasgow (one-day) Tax credits - the essentials - special rate of £25 25 January 2010, Glasgow (half-day) For further information about fees click here. To book a place click here or contact Pauline Chalmers on 0141 552 3303 or at pchalmers@cpagscotland.org.uk  Tax credits news Pre-Budget Report 2009 The Chancellor of the Exchequer, Alistair Darling, announced the following changes affecting tax credits in the Pre-Budget Report: • Offsetting notional entitlement From January 2010, single/couple overpayments are to be reduced by the amount the claimant would have been entitled to if they had claimed correctly. This is a significant change in policy which will alleviate one of the biggest causes of tax credits overpayments. The Report states: HMRC will also improve its service to people who start livingtogether, or who separate. Where customers report these changes late, this results in an overpayment on their previous tax credits award. In January 2010, HMRC will reduce this overpayment by the amount customers would have been entitled to receive had they reported the change promptly. Further details will be set out in the Revenue’s guidance. It is still mandatory to report these changes within one month. This will remain very important to avoid any outstanding overpayment or underpayment.  There is also a risk of a penalty of up to £300 for failure to report a mandatory change of circumstances, although such a decision does carry a right of appeal. It is not clear how this policy change will affect overpayments prior to January 2010, but it will certainly strengthen the case for any ongoing complaint or challenge as it implicitly acknowledges the previous policy was unfair. • Working tax credit (WTC) for people aged 65 and over From April 2011, a new category will be added to the groups of people who are entitled to WTC. People aged 65 and over will be eligible for WTC if working at least 16 hours a week. They will no longer have to fit into the 50+ category, which depends on starting work after 6 months on benefits, and is only payable for one year. Currently, a person aged 65 or over who works 16-29 hours a week would otherwise only be entitled if they are responsible for children or fit into the disabled worker category, or they would have to work at least 30 hours a week to qualify for WTC. The details of the change will have to be set out in regulations. Note that this change will not be introduced until 2011, so there is plenty of time to plan a take-up campaign for older people in part-time work. View the Pre-Budget Report – Chapter 5 contains the changes to tax credits Tax credits rates from April 2010 The Pre-Budget Report also announced increases in the rates of some benefits and credits from April 2010.  The increase to the child element of child tax credit (CTC) expected in April 2011 has been brought forward to April 2010. The exact amounts from April 2010 have now been published on the Revenue’s website, including the following: CTC child element up by almost 3% from £2,235 to £2,300 CTC family element and baby addition unchanged WTC childcare element unchanged All other CTC/WTC elements increased by approx. 1.5% CTC only threshold increased from £16,040 to £16,190 CTC/WTC or WTC threshold unchanged at £6,420 Income disregard, withdrawal rates and income threshold for family element unchanged View the rates To work out how annual rates are used to calculate the exact amount of tax credits, we still have some places available on our course Tax credits - calculating awards (14.01.10).  Recovery of tax credits overpayments from benefits Proposals to allow Revenue debts to be recovered by deduction from social security benefits have been set out. The Social Security Advisory Committee (SSAC) has been asked to consider draft regulations that will allow tax credit overpayments (and other tax debts) to be repaid from certain benefits. This method of recovery would be on a voluntary basis, up to a maximum of £9.75 a week, and would not take priority over any other deductions.  The SSAC is inviting comments on these proposals. It may be worth considering the Revenue’s own Debt Management and Banking Manual, (DMBM555410) which states “If … a claimant is in receipt of Income Support or other DWP benefits etc they may have little or no ability to repay even small amounts.” View the proposals and respond by 22 December 2009 If you wish to unsubscribe from all our welfare rights e-bulletins click here. If this e-bulletin has been forwarded to you and you wish to subscribe to it click here. We would welcome feedback on the e-bulletin, please contact us at acarr@cpagscotland.org.uk with your comments. Thank you. ^ back to top Child Poverty Action Group is a charity registered in England and Wales (registration number 294841) and in Scotland (registration number SC039339). Company limited by guarantee registered in England (registration number 1993854).Registered office: 94 White Lion Street, London N1 9PF. VAT no. 690 8081 17.