No bank account for Tax Credits!

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    At the IRRV seminar for Tax Credits it was mentioned that if claimants did not have a bank account at the start of tax credits, they would be paid by giro for up to 8 wks and if they didn’t have a bank account at the 9th week, tax credit would stop. I can’t find this anywhere in the literature available. Has anyone else heard anything about this?


    It’s in SI 2002 No 2173, para 14.


    Thank you for your information. Much appreciated.


    I’ve been reading this SI and it occurs to me that if the CL
    – has no bank account,
    – loses entitlement after 8 weeks, and
    – then opens a bank account 2 and a half months after losing entitlement
    They will then get a backdated amount of tax credit which we should regard as capital and which even if regarded, most likely will not affect an hb/ctb claim.
    This means that it is to a claimants advantage not to have a bank account and not to open one until the last possible moment to take advantage of the system.
    Has anybody seen anything that would allow us to take lump sums in this instance as income, not capital?

    Answers on a postcard!!



    I have not seen anything that will/would allow us to use the lump sums as income in this case; this is not the only time (or way) that a claimant could take advantage and build up an underpayment which we will not use as income.

    How about pay decreases ? Notify us within one month and IR within three months, add on the time IR will likely take to calculate your new award of TC you have an instant savings scheme !

    How do you afford to live whilst waiting/saving ?
    Of course Hb/Ctb will increase to take up a lot of the shortfall because we will use the actual TC in payment.

    We are looking forward to a whole new range of tactics/circumstances here, we still don’t know how Fraud will be dealt with after April but as I understand it this is apparently ok?

    Is this taking advantage of the system ?


    I have heard a rumour that it is possible for people to fill in something called a “claim form”. Apparently, by doing so you can then get MONEY FROM THE STATE. Who’ll join a campaign to stop this happening? Lets call it the “Campaign against the possibilty of fraud entering the welfare state by dismantling the welfare state campaign” (CATPOFEWSBDTWSC for short).

    Anyway…I digress! I bet anyone that the money lost in the system because a (tiny) number of people work out that they can deprive themselves of a short term increase in their income in order to benefit in the long run will pail into insignificance compared to those people who will get nothing because they don’t know they can claim – or get put off by the form. Why do people also seem more concerned about ludicrously devious scams rather than low take up? I agree that the anomalies between the HB/CTB and Tax Credit schemes are absurd but why is this always seen as a fraud issue? How about the fact that it is confusing for claimants, LA/DWP/IR staff and advisors.


    At a recent training session we were informed that tax credits would stop after 8 weeks. But would only recommence when an account was opened, and backdating would not be considered for the break in claim.

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