Tax credits news
Backdating severe disability element
CPAG in Scotland has received an official answer to the question posed in our August 2009 e-bulletin. This concerned cases where a claimant is already receiving DLA and applies for the highest rate of the care component, which can take several months for a decision to be made. The Revenue has confirmed that the severe disability element can be backdated to the date from which the highest rate care was awarded. This applies as long as the claimant notifies the Revenue within three months of the date the new DLA decision was made.
The Revenue’s guidance will be amended to clarify that:
- The term ‘claim’ (in respect of a qualifying disability benefit) can cover requests for supersession and appeal.
Reducing payments by cheque
The Revenue currently has over 70,000 tax credit claimants being paid by cheque and made nearly 4.5 million cheque payments last year. To reduce costs and keep in line with government policy, the Revenue is making efforts to switch all claimants to direct payment into a bank, building society or post office account. The Revenue has announced the following:
• Changes for new tax credit customers
From April 2010 all new tax credit customers will be required to provide account details in order to receive their payments. Currently around 3,000 new claims are received each month without Direct Payment account details and as a result are paid by cheque.
• Changes for existing tax credit customers
From August 2010 existing cheque customers who claimed tax credits prior to April 2010 will be contacted and asked to provide their account details.
• What if a customer does not have an account?
We anticipate that most of our customers will already have an account that could be used, or will be able to open one. We will provide help to those who have not.
• What will happen if they don’t provide any account details?
Where a customer does not provide us with account details, or does not ask for our help, their payments will stop after 8 weeks. Payment will start again if details are later provided (subject to normal backdating rules).
There has been no change to the existing rules which state tax credits may be paid by other means if it does not appear to be appropriate to the Revenue to pay into an account. The rules states if no account has been notified, that tax credits shall be paid for up to 8 weeks. Payment by other means can continue for longer where there are exceptional circumstances or a reasonable excuse why the claimant is unable to obtain an account. If account details are provided within 3 months, payment should be restored in full.
Q&A: Do I have to be getting child benefit before I can get child tax credit?
Q. My client has been told that his child tax credit claim cannot be processed because he is not receiving child benefit. The children are normally living with him for most of the time but child benefit is still in payment to the ex-partner.
A. No, there is nothing in the child tax credit rules which says that entitlement depends on child benefit or is linked in any way. There are different rules for child benefit which mean it can continue to be paid to another person in some circumstances. Helpfully, the Revenue has recently updated its guidance manual for child tax credit to make this clear:
- A fact that must not be considered as indicating whether a claimant has the main responsibility for a child or qualifying young person when the Commissioners for the Revenue are trying to decide who has main responsibility, is who receives Child Benefit for the child or qualifying young person.
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Michaela Greene
