Tax Credit Awards – April 2005 figure given last year

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    Darren Broughton

    Some Tax Credit award letters from last year gave the amount of TC payable in 2004/5 but also gave an amount from April 2005.

    Can I ask what other LAs have done with these. Have you saved them so that you can revisit the cases in April 2005?

    Did the DWP release any guidance about what we were supposed to do with a “2-year award”?


    We have been ignoring them. Our view is that they are just for the claimant to use as an estimate. As there is no info on the whole award figures, our current guidance offers no way of arriving at a weekly figure based on annual award.

    Unless you favour the “just use the weekly amount on the award as the HB income” method. Personally I think this method is about as accurate as a £5 Rolex. The ONLY benefit of using the weekly figures on the award is that the claimants like it. And when did that become our guiding principle for admin of HB? – eh? eh? (banging fist on desk….)

    Anyway, ranting aside, that’s our theory.


    On reflection, I spose I should add that one benefit of using weekly payments is less stressed assessors. Anything that is easier to understand can’t be bad.


    and now you’ve read A5/2005?


    Now that I’ve read it I am wondering about o/p recovery, one-off amounts, etc.

    Circ A5 looks simple enough – I hope it works out to be simple in practice.
    I want to be positive about it but I’m reserving judgement.

    That way I can say “I told you so” no matter how it turns out 😉


    I’ve just written to the DWP regarding the recalculation of Tax Credits and received the following:

    [color=blue:84c045c051]”As far as I understand most if not all award notices will have the 05/06 rates on them. As the method of calculation has changed from April you will need to recalculate the income from the first instalment received in April[/color:84c045c051].”

    This means that we will be using the provisional amounts from the 2004/5 notifications, which we were planning on ignoring, given that these are provisional amounts.
    It also means that we will have to revisit each Tax Credit claim yet again once the 2005 renewals have been done to input the 2005/6 actual award!!



    Did they give any effective dates.


    4 Weekly payment 13th April 2005

    Therefore effective date would be 17th March 2005.

    However does not come into effect until 01st April 2005. Therefore only used from 01st April 2005 or do we go back to 17th March 2005.

    Example from Circular A5 is in the same benefit week as 01st April 2005.

    I received a reply regarding Weekly payments being in advance:

    Tax credits are not paid in advance or arrears. They are instalments but not tied to specific period. They are annual awards and should be treated as such. This is has caused problems in the past and why new regs have been laid to simplify calculation.

    On the Subject of one-off payments – please continue to use the helpline to clarify details of payments or confirm period instalment relates to as normal. ❓


    No effective dates mentioned in the reply from the DWP. I’ve emailed them again for clarification about this and will post the reply when I get it!

    Even the simplification of this calculation turns out not to be simple when you look at all the ramifications which haven’t been considered in the guidance.



    Concerning effective dates, I’ve now had a reply from DWP.

    The procedure is to use the first payment date in April, which will obviously be effective from some time in March but to only apply it from the correct date in April for the change in regs; thus either 1.4.05 or 4.4.05.

    To illustrate with Lis’s example:

    first 4-weekly instalment of 2005/6 paid on April 14th, covers the period 18 March to 14th April.

    We would input this from either 1st or 4th April as appropriate to the claim.


    [quote:0766dce0d5]We would input this from either 1st or 4th April as appropriate to the claim.[/quote:0766dce0d5]

    Hi eistrange,

    Well done for getting more info…
    Any clues about how to decide between 1st or 4th?

    “appropriate to the claim” » ???????


    Hi Peter

    Well, circular A6 states that it should be the 1st April in CTB only cases and in cases where rent is paid other than weekly and the 4th April for weekly rental liability cases.

    Personally I would have expected to use 1st April for CTB claims and 4th April for all HB claims, in the same way as we apply the uprating for the new financial year, since this an amendement to the Regs.



    One start date for CTB only and non-weekly HB, a different one for Weekly HB.

    Right…:shock: that’s really er…. great.

    Must re-read that circ.


    Just taking the subject a little bit further – what about a weekly paid CTC case, where the first payment being made in 2005/06 is on the 12.04.05. This is a Tuesday, and the effective date for changing the amount of CTC in the HB/CTB award as per circ A5 would be the 6.4.05. How does this fit with the 1st or the 4th April, when in fact the increased amount of CTC does not apply until the 6th?

    Another question, what about WTC payments that are paid at a daily rate? I have a case where the daily rate for WTC does not change until 6.4.05. Circ A5 states ‘treat the person as being paid x per day from and including 6.4.05’. If we have got to use the provisional figures from April – how does the 1st and the 4th fit with these cases, or do we apply the new calculation method from the date it is paid from? Personally I think we should but I would be very grateful of your views on all of the above. 😯


    I’ve thought a lot about this, since I’m preparing training notes for assessors to start amending all our Tax Credit claims before April.

    What I propose for cases where the first Tax Credit instalment of 2005/6 covers a period starting after 1 April is to use the 2004/5 instalments from 1 April up to the Monday after the date the first 2005/6 instalment becomes effective.


    First weekly CTC instalment of £100 paid on 15 April 2005. This would be input for HB/CTB purposes from Monday 11 April.

    Instalments for the year 2004/5 were £97.50 per week.

    I would use the £97.50 from 1 April up to 11 April and then change to £100 per week as the regular weekly instalment from then on.

    Similarly for daily rates. I would use the 2004/5 daily rate up to the Monday after the new 2005/6 daily rate takes effect.

    Does this sound sensible?????


    It does and I was thinking along the same lines. However for the daily case I had e-mailed the DWP. The case in question had daily payments of £8.27 being paid at the end of 04/05. From 06/04 the daily rate changes to £8.55. The DWP reply is as follows:

    “[i:5dddcd71c1]the new method of calculation starts from 1st or 4th April as appropriate. If the award notice shows the daily rate from 06/04 then you apply it from that date. Therefore for w/com 4 April you would have an income of 2 days @ 8.27 a day and 5 days a@ 8.55 a day”.[/i:5dddcd71c1]

    How does this fit with your training notes?

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