date of change for tc award

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    Please can someone tell me the correct effective date to use when a customer sends us their notification letter showing the finalised award for 04/05. I know we calc the weekly amount by counting the no. of days from the day after the date of the last payment of the old award, but then when do we put it on the hb claim from? The notification date seems the most logical because the customer couldn’t tell us until they get the letter! and also we don’t want loads of overpayments. But part of me says take it back to the day after the date of the last payment. Any opinions/working practices greatly appreciated! 😳


    I cant find any written guidance on this Val but we always use the Monday following the date of the notification letter. As you said, it avoids overpayments which arent really the claimants fault anyway and the reason we use such ‘sensible’ 😆 calculations on Tax Creds in the first place is to avoid creating unfair overpayments. Hence classing past payments as capital etc etc…….

    Sorry cant give you any formal guidance but thats how we do it. ❓


    thanks ever so much, I think we’ll use the notification date, it seems most logical 😀


    Sorry to disagree but I thought that it was the day after the last payment at the old rate


    I’ve been trying to get inside the minds of the people who devised this fiendish guidance, and I think I understand the logic. If I’m right, I think I agree with jerikaz.

    The logic underlying the DWP’s method does point towards picking up the changed income from the start of the payment cycle, so that there will always be a “structural” over- or underpayment.

    As we all know, the DWP suggests different methods depending on whether the TC claim is a new one or an amendment of an existing one.

    The reason why DWP suggests date of notice as the effective date for a new award is that the claimant has presumably not been in receipt of that item of income before, so the change in his/her income is likely to be quite a big one. To avoid an overpayment, you pick that up from the most recent date possible. Fair dos, though, all the income has to be taken into account so you get a relatively high income over a relatively short period.

    But when the claimant was already getting Tax Credit and it changes, the change in weekly income is likely to be less pronounced, especially if it’s a year-end renewal without that much change in the claimant’s taxable income. Therefore, any overpayment arising from an increase in Tax Credit income is likely to be smaller, and even then the blow is softened by having the income spread out over a longer period, typically 4 weeks longer than with the new claim option. All things considered, this is reckoned to be more generous and less disruptive to claimants. Fair dos though: if you are spreading their income over a long period to get the weekly amount down, it’s only fair to take it into account over that whole period.

    So there you have it: the two options. Use it over a shorter period with a higher weekly average, or use it over a longer period with a lower weekly average.

    But it seems to go against the policy intention to use it over a shorter period and to take the lower weekly average as well, which is what was being suggested above before jerikaz’s intervention. That way, the claimants would be having their cake and eating it.

    I think the DWP guidance is doing its best to be fair.

    Did you know it’s National Be Kind to the Adelphi Day? We can start trashing them again on Monday.


    😕 Yes I can see your points, thanks for your inputs (just when I thought I’d made a decision!!-only joking) I’m going away now to have a think…and a word with the girl who deals with overpayments!


    [quote:07e26e6179] (jerikaz) Sorry to disagree but I thought that it was the day after the last payment at the old rate[/quote:07e26e6179]

    Just thought I’d respond to this point by jerikaz.

    Day after last payment at old rate: that’s the way to determine the date of a change in rate in TCs.

    It doesn’t help to determine what date it is effective in HB. That would be the notification date (well…. the Monday following – but you get the point).

    The reason the date of change for TCs is important is (as Peter Barker points out) so that you know how many actual days the TC amount is paid over – enabling you to calc an accurate daily/weekly rate.


    Incidentally the “day after last payment at old rate” is calc’d differently for weekly or 4 weekly cases.

    [i:07e26e6179]Weekly (paid in advance): [/i:07e26e6179]its the date of the first changed payment.
    [i:07e26e6179]4 weekly (paid in arrears):[/i:07e26e6179] its date of first changed payment minus 27 days

    These dates are the day after the last day [b:07e26e6179]covered by [/b:07e26e6179]the old rate. It doesn’t just mean the day after the last payment [b:07e26e6179]installment [/b:07e26e6179]was made to the customer.

    This only becomes clear when you try out the examples given in the guidance and recent circulars.

    And yes Peter B – quite agree – it is all very fiendish.


    Peter C,

    I seem to be under the misapprehension that all Tax Credits are paid in arrears. Could you point me in the right direction where it states weekly payments are made in advance?

    Am I correct in thinking fortnightly payments are in arrears?



    O god – now you’re asking. I haven’t looked at this particular point since 2003. Its in the HB/CTB guide to tax credits from the DWP somewhere. I’ll have a look tomorrow.


    I emailed Lucy Da Silva to see what she says about the effective date. I thought I’d post the response:

    ‘The normal change of circumstances rule applies. Therefore, your input date should be the Monday following the date of change. Please see example in para 50 of circular A18/04 for effective dates.’

    I’ve yet to work through the example, I hope that doesn’t re-confuse me again! 🙄


    I wouldn’t bother – that para doesn’t clarify things enough.
    i.e. it only deals with a weekly paid scenario

    I’ll see what I can find which covers weekly and 4 weekly.


    Firstly, the general point about the effective date of CoC for HB.

    In ALL cases, this is the Monday following the date on the award notice (the processing date at the top).
    No difference here for weekly or 4 weekly paid customers.

    The date that DOES vary is the actual date of the change of rate of TaxCreds.

    This is spelled out most clearly in Section 13 of “HB/CTB: A Guide to the new tax credits” from the DWP.

    [b:b0d8ff04d2]See Para 1308 [/b:b0d8ff04d2]

    [b:b0d8ff04d2]Example 1 – Weekly paid:[/b:b0d8ff04d2]
    “The change of circumstance in respect of the change
    in income occurs on the date of payment of the first
    REVISED instalment for the new period of the award
    and will take effect from the following Monday.”

    [b:b0d8ff04d2]Example 3 – Four weekly paid:[/b:b0d8ff04d2]
    “As the four-weekly instalments are paid at the end of,
    and not the start of, each four week period the date of
    the change of circumstances occurs is the day FOLLOWING
    the payment of the FINAL instalment at the ORIGINAL rate
    and the date it takes effect is the following Monday.”


    The reason this date is important is that it determines the length of time over which the original and revised rates are payable.
    This in turn affects the daily rate to use before and after the change.

    Personally, I prefer the following rule of thumb:
    4 weekly cases – date of first REVISED payment minus 27 days

    Reason I prefer it is that it refers to the revised payment date which is actually printed on the award notice.
    It arrives at the same date as the DWP method.


    [b:b0d8ff04d2]Does it actually matter?[/b:b0d8ff04d2]

    I reckon so. Unless you treat weeklies and 4 weeklies differently, you end up with an error of nearly 8% in the daily rate for the 4 weeklies (caused by the 4 week offset in a 52 week period)

    So, to clarify:

    [b:b0d8ff04d2]Effective date for HB:[/b:b0d8ff04d2]
    ALL CASES – Monday following processing date on top of Award Notice

    [b:b0d8ff04d2]Date of TC rate change – used for calculating daily rates:
    [/b:b0d8ff04d2]1 weekly cases – date of first REVISED payment
    4 weekly cases – date of first REVISED payment minus 27 days


    Amendment 10:
    Section 14:
    Para 1510 also confirms this approach for 4 weeklies


    This is a nightmare. I am questioning my own name.

    There is still an issue we haven’t cleared up here. I’m not convinced that the DWP intends all TC changes to be picked up from the Monday following the date of the notice.

    If that were so, why does the guidance (including the extract that you posted from para 1308 Peter C) talk about the change of circumstance being picked up from the Monday following the start of the payment cycle? I read example 3 in the extract as meaning that HB and CTB will be affected from the Monday after the start of the first revised payment.

    I cannot see any other reason for the DWP to use those words in the example. If the new rate of income is not picked up until the Monday after the notice, and the weekly rate is calculated by reference to the start of the payment cycle, what function does the Monday after the start of the payment cycle fulfil? None as far as I can see. So why identify it as a key date?

    This case is not closed!


    Ah Peter B. The nightmare continues….

    The reason that example 3 refers to the “monday following…” is because it is a predicted change award. So you know about it BEFORE it happens.

    Therefore you just need to determine the future effective date of the change of rate so that you can work out the daily rate to use.

    The complications arise when there is a NON-predicted change which we find out about in a revised award notice AFTER the fact. In that case the monday after the award letter date is the effective date for HB – but you still need to determine the date of the actual change of rate so you can work out the daily rate to apply.

    I have no real “position” to defend here. If I am wrong I am quite happy to see the error of my ways, eat my hat, eat your hat – Hell, I’ll even eat my cat.

    Any quibbles or cat recipies received with interest.

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