Terms & Conditions

[Anonymous]

I have received a tax credit award notice where the only child in the household is 19 on 20/12/03. The award notice states a first payment of £156.00 with further payments of £155.94 – 4 weekly until 08/12/03 making a total award of £1403.52. On telephoning the helpline, they insisted that the award was for a full year. Upon interogation I discovered that 08/12/03 was indeed the date the final payment is to be made. At first I thought that I had to divide the total award by the number of days from 06/04/03 to 08/12/03. However, if the dependant is not 19 until 20/12/03 surely the award should cover the period 06/04/03 to 19/12/03 inclusive. This method equates to a weekly income of £38.08 per week which appears to be the maximum rate for one child over 1.

Does anyone have any other thoughts on this – I can’t find any guidance in the tax credit handbook.

[Anonymous]

See “the guide” section 13 paras 1305 – 1309.

(Section 13 is included in Amendment 7)

Using the principles in these paras, it sounds like your customer is having their TC cut short 4 weeks too early.

The change should take effect from the first payday following the change. i.e 5th Jan 2004

Am I missing something?

[janish]

If they are paying 38.08 pw until 19/12/03 and she will have received it all by 8/12/03, she is gaining, is she not? And for HB the date of change of circs is 9/12/03 so she gains there as well?

[Anonymous]

Actually I thought the fairest way to treat it was to use £38.08 per week until the Monday following the 19th birthday.

Does anyone else have any views on this??

[Anonymous]

Generally, my view is that in calculating tax credits we need to forget (momentarily!) that we are HB/CTB officers. The fact that we are from a HB/CTB background probably makes it more difficult for us to accept than would be the case for people picking this up for the first time.
We are in danger of spending too much time in trying to fit square pegs into round holes! Sadly, we can no longer apportion income into neatly rounded figures that we have become accustomed to.
The facts are that the systems are different. Admittedly, trying to explain to a customer is going to be very difficult but unfortunately this is what we have been given.

Is anyone certain as to whether or not this example is a part-year award or an award with an in-year change of circumstances?

If this is indeed a part-year award, you cannot calculate it as there are no insructions (as per Para 1302).
Assuming the latter n.b. in-year change, you would proceed as per the instructions.

(a) HB/CTB effective date for child is the Monday after the 19th birthday i.e. with effect from 22/12/2003

(b) HB/CTB effective date for NTC is the Monday after the change of circumstances (COC). Remember that the COC is not the event which led to the change – it is the COC relating to the payment dates. In the case of 4 weekly payments, the COC is the day after the final payment (09/12/03) i.e. effective from 15/12/2003.
£1403.52 divided by 247 days (6/4-8/12) = £39.76.

It may not sit comfortably but that is it!

Remember that there is no such thing as a weekly or monthly tax credit award – payments are merely a method of achieving an annual lump sum.

[Author]

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