Appeal about the date CTC included as income for HB.

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    Laura Moore

    We have received an appeal from someone who was awarded CTC from 6th April, which they were advised of by IR letter dated 27th February. We used the information from the IR proforma to amend HB to include CTC from 7th April. This was done before the tax credits went live,on a special job that was supplied by our software providers, enabling us to input all the proforma information onto our HB system. in one pc job.
    The claimant states that as they did not receive any payments until 2nd May, the CTC should not be included on their claim until that date. This seems reasonable, as the guidance does say that tax credits are to be taken into account ‘from the benefit week following the date they are put into payment to the claimant’. However, this would mean all people paid 4 weekly would not have tax credit included on their HB income until 5th May. Is this correct?


    There is a distinction between payments that are “in arrears” (e.g. your case) and “of arrears” (in which case the special rules about income/capital apply). You have definitely done the right thing by taking the Tax Credits into account from 7th April 2003. SI2003/308 amended Reg 68 of the HB Regs and Reg 59 of the CTB regs to ensure that “where the change of circumstances…is the commencement of entitlement to working tax credit or a child tax credit…on 6th April 2003…that change of circumstances shall take effect on 7th April 2003”.


    I agree with Mark.

    Payment “of arrears” represents the amount of benefit due between:
    * the start of their award
    * the Sunday of the benefit week in which the award letter arrived.

    If entitlement begins of 6th April but the award letter does not arrive until the 4th May, there are 4 weeks (before the award letter arrived) which count as arrears.

    So, as the award letter came in before the scheme started there is no arrears period.

    Payment “in arrears” is not relevant here. The fact that someone gets paid 4 weeks “in arrears” does not actually lead to any payments “of arrears”.

    See Section 12 of “the guide” – Points to Remember.


    I agree with the need to amend from 7/4/03. However, can I play Devils Advocate on the calculation of arrears and amendment dates:

    Section 4 of Amendment 8 to “the guide” has some examples of when claims should be amended and how overpayments should be dealt with. But…

    Case 3, example 2, finishes with the statement that “the overpayment will only arise from the first week of the current 4-week period”. Therefore, where a 4 weekly payment is made w/c 28/4/03, the HB/CTB would be amended from 7/4/03. It would then follow that where a 4 weekly payment is made w/c 26/5/03, the HB/CTB is amended from 5/5/03 with any tax credit award made for the period 7/4/03-4/5/03 being treated as capital.


    Case 4 describes a customer who claims NTC 1/5/03, has it backdated to 6/4/03 and is notified on 15/5/03 of the award. This example states that the HB/CTB overpayment only arises from the date of award and that arrears are calculated from 6/4/03 to the day before the date of the award.

    So which is right? The start of the most recent payment period or the Monday following the date of the award letter. Or am I missing something here…?:15:

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