Tax Credits and disregards

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    Can somebody please confirm that any excess of Childcare Disregard and the 30 hour premium after deduction from earnings can then be deducted from both Working Tax Credit and Child Tax Credit.


    There is something in HB Direct Issue 10 which indicates that further details regarding Tax Credits are to be issued as an annex to the original handbook. With a bit of luck, it will be in there


    [url=]click here to view updated guide[/url]


    Thanks for that – unfortunately I don’t feel that my question has been answered.
    Since posting on the message board I contacted the DWP – they couldn’t give me answer either.


    Anyone have any news on this yet (whether or not child care costs or the 30+ hours disregard in excess of earned income can get ‘taken off’ the WTC/CTC (at the moment it can get taken off the WFTC/DPTC).

    If not, aren’t the DWP cutting it a bit fine. What have the bigger IT providers programmed in for after April 2003 (TDBC use an in-house system and I’m the one who has to write the IT specifications!).

    Also, is the 30+ hours additional earnings disregard (£11.90 from April 2003) going to be extended in HB/CTB to couples and single people over 25 who DO NOT claim/receive WTC.

    It’s less than 7 weeks before year end processing starts here … do you think we will get all the answers to these and other questions in time?

    chris harvey

    I’ve checked the regs that were laid last September and it looks fairly clear to me. The revised para 16 of Sch 3 states that the 30 hour earnings disregard will apply to people not claiming NTC if they meet the rules which include anyone age 25+ working 30 hours a week. So the answer to Simon’s 3rd para is yes. The revised para 58 in sch 4 answers the first query, in that where the earnings left after standard and child care disregards are insufficient the 30 hour element can be disregarded from Working Tax Credit (not Child Tax Credit). Hope this helps. The SI no. is 2002/2402 by the way.


    I agree with Chris. But the revised para 16 of Sch 3 is still very odd in other areas. I just can’t work out which couples can aggregate their hours in order to qualify for the 30hr disregard. For example:

    *What should we read into the fact that 16(2)(b)(ii)(bb) makes direct reference to aggregation of hours but paras 16(2)(a) and 16(2)(b)(iv) do not?

    *Why in Para 16(2)(b)(i) does it say “is engaged in remunerative work” but in Para 16(2)(b)(iv) “are engaged in remunerative work” – and does this tell us anything about whether one implies aggregation of hours and the other does not?

    *Why are there lots of references to Remunerative work of not less than 16 hours per week on average when the remunerative work definition is already contained in Regulation 4?

    Can anyone work this stuff out?


    Thank you Chris and Mark for your replies.
    There must be some mistake in the revision of para 16 schedule 3!
    Take this scenario:
    Claimant and partner reside together and claim HB/CTB. Neither is disabled or over 80 and they do not have children. The claimant works 16 hours a week and the partner also works 16 hours a week which means between them they work 32 hours. They don’t claim WTC.
    When their earned income is assessed for HB/CTB purposes, they will [u:5ef698cd9f]not[/u:5ef698cd9f] get the additional 30+ hours earned income disregard because they don’t meet the condition in para 16(2)(b)(ii)(cc).
    However, if they claimed WTC, my understanding is that the maximum WTC they could get would include the 30+ hours addition. When their HB/CTB came to be reassessed to include their WTC entitlement, we could take the additional earned income disregard because it is included in their WTC award (as per para 16(2)(a)).
    Surely there is some discrepancy here and I think, Chris, this is what you were trying to get at. To answer your query, it appears you can’t aggregate the hours of couples where neither works at least 30 hours a week and they don’t have children. What does anyone else think??


    It seems quite possible to read sched 4 of SI 2002 No. 2402 as giving the “working 30 hours” disregard to anyone “working 30 hours or more a week” regardless of age or status.

    Yet the the HB Tax Credits guide thinks it extends the existing HB/CTB disregard to those aged 25 and over without children – mirroring the Working Tax Credit regime.

    Should the HB disregard be available to anyone “working 30 hours +” ?

    We need to know soon ! All views much appreciated.


    After much soul searching I have concluded that the full qualifying conditions for the 30hrs+ premium are:

    a) The claimant or partner receives the 30hrs premium paid with Working Tax Credit, or

    b) The claimant or partner is aged at least 25 and does paid work averaging at least 30hrs per week, or

    c) The claimant and partner have a dependant child, at least one of them does paid work of at least 16hrs per week on average and their combined working hours average at least 30 hours per week, or

    d) The claimant is a Lone Parent and does paid work averaging at least 30hrs per week, or

    e) The claimant receives a higher pensioner premium or disability premium in their applicable amount and either the disabled person or the partner works at least 30 hours per week on average. If the partner satisfies the 30 hour condition, the disabled person must be working an average of 16 hours or more per week.

    I put this list to the Adelphi and they sent back a short message confirming that they believed it to be true. Our software supplier agrees with it too now but unfortunately the wrong rules will be in place from April until they fix their original scripting.


    I can live with Mark’s astute analysis (posted above).
    Worth noting that this logic gives the “working 30 hours” disregard to a single person if he is aged at least 25 and works 30hrs per week.
    Again, mirroring the Working Tax Credit regime.

    Julian Hobson

    Simon raised the question about the 30+ hours addition in WTC for couples where both work 16 hours. I’m sure that my reading of the Tax Credit Regs is that the provisions in those regs mirror the provisions in Schedule 3 Para 16 i.e no aggregation of hours for couples without children (see reg 20(1)(c) of Working Tax Credit (Entitlement and maximum Rate)
    Regs 2002(SI 2005).

    I think that I fully agree with Mark’s stab at simplification.

    Whoever drafts the TC Regs is much better at it than the person that did the HB amendments, have a look at reg 20(1)(C) but bear in mind that the age issue for “SINKY’s” and “DINKY’s” (25+) is covered elsewhere in the TC regs (Reg 4 Second Condition) so on first reading it looks like it doesn’t apply. :21:


    If the intention is to allow childcare disregard to be offset against new TCs (where earnings are too low to benefit in full from an earnings disregard) then presumably reg 21(1ZA) would need to be amended – i’ve not come across anything which does this yet – an oversight perhaps?


    Jon was right about the need to amend reg 21(1ZA). This has now been done by SI2003/455 which tidies up a few other similar areas as well.


    As promsed (though a bit late in the day) SI2003/455 also amends the HB/CTB regs to give the disability premium or higher pensioner premium to anyone who gets the disability element or severe disability element of working tax credit.

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