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 April 2010 Dear Colleague, Welcome to the April 2010 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     - CPAG in Scotland Annual Conference: Welfare Rights 2010 Tax credits news     - Tax credits – election special     - Recovery of overpayments from benefits     - Child tax credit in another EEA country       - Appeals     - Renewals              CPAG in Scotland news and events Tax credits training  Introduction to tax credits 21 May 2010, Glasgow (10am - 4pm) This one-day course looks in detail at who is eligible for tax credits, how to claim and how decisions are made. It will help you check payments and gives you a basic guide to calculating tax credits. Level    Introductory Tutor    Mark Willis Course fee: £93 for CABx, £108 for voluntary, colleges and housing associations and £153 for statutory. To book a place click here or contact us on 0141 552 3303.   CPAG in Scotland Annual Conference: Welfare Rights 2010 Friday 18 June 2010, 10am to 4pm, Glasgow - £110 per delegate  With the dust settling from the UK general election and Scottish elections less than a year away this conference provides an opportunity to take stock of the implications for advisers and find out about the latest developments in benefits and tax credits. Come and join advisers, leading politicians and welfare reform campaigners to debate how the Scottish Government has supported welfare rights services and their role in tackling poverty and how the new UK Government will approach the welfare system. The annual conference for welfare rights workers, other advisers and policy workers in Scotland. For information about conference workshops and speakers click here. To book a place please print off our conference programme and complete the booking form.  Tax credits news Tax credits – election special The tax credits system may be subject to significant changes in the near future, depending on the outcome of the general election. The main parties have set out their plans for tax credits in their manifestos as follows: Labour: tax credits will be increased not cut; guarantee that when someone who has found it difficult to get into work comes off benefits, their family will be at least £40 a week better off (the National Minimum Wage and tax credits should always make work pay); the child element of the Child Tax Credit will be increased by £4 a week for families with children aged one and two from 2012, paid regardless of the marital status of the parents; will enable people aged 60 and over to claim Working Tax Credit if they work at least 16 hours a week, rather than 30 hours as at present. Conservatives: support tax credits and will continue to provide the range of tax credits to families, although will stop paying tax credits to better-off families with incomes over £50,000; will reform the administration of tax credits to reduce fraud and overpayments, which hit the poorest families hardest; will cut government contributions to Child Trust Funds for all but the poorest third of families and families with disabled children; will end the ‘couple penalty’ for all couples in the tax credit system. Liberal Democrats: will restrict tax credits; will end the rollercoaster of tax credit overpayments by fixing payments for six months at a time; will also target payments towards those who need them most; will put in place cuts which could be realised within the financial year, such as scrapping the Child Trust Fund or restricting tax credits. Scottish National Party: the benefits system should be designed to provide incentives for work, rather than barriers to work. It should also more closely meet Scottish needs and circumstances and be easier to access; will press the UK government to investigate new approaches such as a maximum combined withdrawal rate for benefits. The manifestos can be viewed in full on each party’s website via the links above. Recovery of overpayments from benefits From May 2010, the Revenue is trialling recovery of tax credit overpayments by making deductions from social security benefits. The trial will involve 5,000 tax credit claimants, who will receive a letter from the Revenue asking if they want to participate. Regulations have been amended to allow amounts to be deducted from the following benefits: income support income-based jobseeker’s allowance income-related employment and support allowance pension credit The maximum rate of the deduction is £9.75 a week and tax credits debt will be at the bottom of the current priority list of deductions. If a claimant is already repaying a benefit overpayment then no tax credit recovery will be taken until that debt has been cleared. Participation will be on a voluntary basis and the claimant can withdraw from the agreement at any time.  If a claimant does not agree to deductions or does not respond to the letter, there will be no further action regarding recovery from benefits and the debt will be pursued by other methods. View the regulations Child tax credit in another EEA country A recent Upper Tribunal decision concerned a UK family living in another European Economic Area (EEA) country, Sweden in this case.  The couple had never worked in any country other than the UK, and were retired due to ill-health. Child benefit was still in payment, but child tax credit had been stopped. The judge held that this was the correct approach under UK and European law in these circumstances at the time. However, it was noted that the European law affecting pensioners is changing from 10 May, as stated by the Revenue’s Solicitor: “It is accepted that from that date UK state pensioners living elsewhere in the EEA will be able to claim the child tax credit.” This change will not affect people who are working in another EEA country; generally, they can claim the equivalent family benefits of the country in which they are working.  Appeals The Work and Pensions Committee report on decision making contains some interesting statistics on tax credits appeals, and allows comparison with social security benefits. The number of tax credit appeals that make it to tribunals has increased but is still relatively low. The percentage of cases that are decided in favour of the appellant is also consistently lower than in most other benefits. 637 CTC appeals decided in 2008-09 (453 in 2007-08) 15% of CTC appeals were successful (10% in 2007-08) 79 WTC appeals decided in 2008-09 (78 in 2007-08) 18% of WTC appeals were successful (17% in 2007-08) Comparing this with the overall total of 165,865 appeals in 2008-09 (42.07% successful) it is apparent that tax credits still make up a very small part of tribunals’ work. This drew the following comment by MPs and Upper Tribunal judges (Annex C): The number of tax credit appeals that reached tribunals was tiny compared to the number of social security appeals. There was no suggestion that this was because the standard of decision-making was better with regard to tax credits; rather, it raised concerns that disputes were getting lost in the tax credit reconsideration process. The report also shows that over half of tax credit appeals were decided at a hearing (rather than on the papers alone), and the success rate was significantly higher in these cases. If you have had a successful tax credits appeal at tribunal, please contact us and we may include a summary in a future e-bulletin. Remember that for assistance in preparing appeals representatives can contact CPAG in Scotland’s advice line 0141 552 0552 or e-mail advice@cpagscotland.org.uk. View the full report – Annex A: Appeals Statistics is on page 52 Renewals It’s that time of year again, when the Revenue writes to all tax credit claimants to finalise claims for 2009/10 and renew their claims for 2010/11. The Revenue has produced a new help sheet for advisers to help their clients to take the right action at the right time. This includes information on the option of withdrawing claims, as mentioned in the March e-bulletin. Importantly, this states that any provisional payments made after the date the claim is ceased will be recoverable, so this may not mean an end to the problems of overpayment recovery, making it seem an even less attractive option to anyone who is entitled to an award. View Tax Credit Annual Review Help Sheets 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.