Reply To: Tax credits


Hi Sunita, there is a distinction here between tax credits and arrears of tax credits. Tax credits are treated as income and are taken into account from the benefit week following the date they are put into payment to the claimant. Arrears of tax credits, however, are paid in a lump sum and are treated as capital and not income. Also, where the arrears are paid as a result of a change in circs, they are disregarded for 52 weeks.

So, I think I’m right in saying that in your example, the lump sum the clmt received on 10.6.03 would be input as capital from the Monday following that date and the weekly tax credit income also input from the Monday following 10.6.03

Hope this helps.