Terms & Conditions

[musd]

Going around in circles a bit at the minute and could just do with some clarification. If customer receives sick pay and working tax credit am I right in thinking that they are still entitled to the earnings disregard from their actual earnings but they are NOTentitled to the additional earning disregard from their work tax credits?

[Anonymous]

Just came on here to look at the guidance for this topic myself, as I always have an argument with myself over it!

It boils down to whether they are in ‘remunerative employment’ or not. The guidance states: –

[quote:95a02379c6]W2.134 For the purposes of working out the average hours worked a week

the regulations provide that the provisions in regulation 6 of the HB and CTB General Regulations (remunerative work) can be used, but reading 30 hours for 16 hours, as appropriate
[b:95a02379c6]periods of sickness and maternity/paternity leave do not count [/b:95a02379c6][/quote:95a02379c6]

Therefore, no…the [b:95a02379c6]additional[/b:95a02379c6] earnings disregard (for HB/CTB) should not be awarded. They would still get the normal earnings disregard however. I’m not clued up enough about Tax Credit legislation to say whether they would/should still treat them as being in remunerative employment, but my guess would be no!

[Jon__Blackwell]

You are correct to say that the remunerative work route to AED is not available to this claimant – HBR Sched 4 para 17(2)(b).

However, the claimant continues to receive WTC so either 17(2)(a) [30hr credit] or 17(2)(c) [age 50+ credit] may be applicable.

If awarded, the AED can be offset against WTC (if earnings are too low) – the standard earnings disregard can only be applied to earnings(incl S*P).

[Anonymous]

The guidance grossly over simplifies the situtation, not least because there are claimants working over 30hrs per week who are receiving child tax credit only for whom the additional (30hrs) earnings disregard applies. This may continue to apply during periods of sickness etc.

The relevant provision for HB is paragraph 17((2)(a) of Sch 4 of the HB Regs 2006
a) the claimant, or if he is a member of a couple, either the claimant or his partner, is a person to whom regulation 20(1)(c) of the Working Tax Credit Regulations applies

Regulation 20(1)(c) of theWorking Tax Credit (Entitllement and Maximum Rate) Regulations provides:

(c) the 30 hour element specified in column (2) of the table in Schedule 2 at paragraph 3 in respect of –
(i) a single claimant who works for not less than 30 hours per week,
(ii) a couple either or both of whom work for not less than 30 hours per week; or
(iii) a couple, at least one of whom is responsible for a child or a qualifying young person and at least one of whom works for 16 hours per week if their hours of work when aggregated amount to at least 30 hours per week;

Regulation 6 of the Housing Benefit Regulations of course has no bearing on whether a claimant still to be considered to be in qualifying remunerative work for the purposes of Regulation 20. This is provided for by Regulation 5 of the Working Tax Credit (Entitlement and Maximum Rate) Regulations:

5. [1Time off in connection with [3 childbirth] and adoption]
[1(1) This regulation applies for any period during which a person-
(a) is paid maternity allowance,
(b) is paid maternity pay,
(c) is absent from work during an ordinary maternity leave period under section 71 of the Employment Rights Act 1996 or Article 103A of the Employment Rights (Northern Ireland) Order 1996
[(ca) is absent from work during the first 13 weeks of an additional maternity leave period under section 73 of the Employment Rights Act 1996 or article 105 of the Employment Rights (Northern Ireland) Order 1996,]
(d) is paid statutory paternity pay,
(e) is absent from work during an ordinary maternity leave period under section 80A of the Employment Rights Act 1996 or Article 112A of the Employment Rights (Northern Ireland) Order 1996
(f) is paid statutory adoption pay, […]
(g) is absent from work during an ordinary maternity leave period under section 75A of the Employment Rights Act 1996 or Article 107A of the Employment Rights (Northern Ireland) Order 1996[ , or
(ga) is absent from work during the first 13 weeks of an additional adoption leave period under section 75B of the Employment Rights Act 1996 or article 107B of the Employment Rights (Northern Ireland) Order 1996.]

(2) For the purposes of the conditions in regulation 4(1), the person is treated as being engaged in qualifying remunerative work during the period,

Regulation 5 therefore provides that Regulation 20(1)(c) may still apply during periods of sickensss etc. This is of course in line with the general principle that tax credits are annual allowances

Regualtion 20(1)(c) of the Working tax Credit Regulations applies to a claimant who does not qualify for working tax credit because her/his income is otherwise too high. This is because Regulation 20(1)(c) only provides for the calculation of the maximum rate of working tax credit, it does not of itself provide for the calculation of amount payable in an individual case.

This is reflected by the fact that a single parent whose working tax credit would otherwise include the 30 hr element, along with the basic element and the single parent element would not be entitled to working tax credit is her gorss earnings exceed £18,215. She would be entitled to maximum child tax credit, which for a single parent with one child over the age of one is currently £2,845

If on the other hand the 30hr element was not included in her working tax credit, she would not be entitled to working tax credit if her earnings exceed £16,190. If the same person whose working tax credit does not include the 30hr element had earnings of £18,215, her child tax credit entitlement would only be £2055.

I wonder how many such claimants are not identified as being entitled to the additional earnings disregard during periods of sickness etc

[Jon__Blackwell]

[quote:b461ed57cc]The guidance grossly over simplifies the situtation[/quote:b461ed57cc]

I can agree with that. HBGM is often incomplete/out of date that I’m always surprised to see it cited here.

[quote:b461ed57cc]not least because there are claimants working over 30hrs per week who are receiving child tax credit only for whom the additional (30hrs) earnings disregard applies. This may continue to apply during periods of sickness etc. [/quote:b461ed57cc]

True – as you say, as long as they retain entitlement to a relevant WTC element as part of their TC maximum amount – it doesn’t matter if they only actually get CTC .

The remunerative work route only needs to be considered (and hence HBR 6 invoked, in a modified form) once the tax credits routes have been shown not to apply. (My guess is that this won’t always be obvious to an HB assessor).

[quote:b461ed57cc]I wonder how many such claimants are not identified as being entitled to the additional earnings disregard during periods of sickness etc.[/quote:b461ed57cc]

Probably quite a few – it often seems to cause problems.

[/quote]

[cfowkes]

We used to allow the AED where WTC would be payable with the 30 hour element if a claim was made. However I was persuaded by postings on HBINFO and the DWP (who changed their minds over the course of a couple of years) to only allow if the 30 -hour element was actually in the WTC award. I lost the confidence to continue.

What is interesting though is that sch 5 paragraph 17 when mentioning the 50+ element the regs actually state applies or would apply if an application for WTC was made. This does suggest that applies means receiving.

[Anonymous]

Cfowkes:-

Do you have any of the e-mails that you received from the DWP?

Would be interested to have a read.

Thanks

[Author]

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