Tax credits and early years e-bulletin December 2018 | CPAG

Tax credits and early years e-bulletin December 2018

15 December 2018
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The Best Start Grant is a package of three payments, delivered by Social Security Scotland, that will give extra money to lower-income families during the early years of a child’s life. The three payments include the Pregnancy and Baby Payment, which is open for applications on 10 December 2018.

The Pregnancy and Baby Payment will help with expenses in pregnancy or the expenses of having a baby. This replaces the DWP’s Sure Start Maternity Grant and will put more money into the pockets of families on low incomes – paying £600 on the birth of a first child and £300 for each sibling born thereafter.

Two additional payments of £250 will help with the costs of early learning and school preparation costs and will be open for applications by summer 2019.

To be eligible for the Pregnancy and Baby Payment, the family must live in Scotland and usually be in receipt of a qualifying benefit:

  • Income Support
  • Income-based Jobseekers Allowance
  • Income-related Employment and Support Allowance
  • Pension Credit
  • Universal Credit
  • Housing Benefit
  • Child Tax Credit
  • Working Tax Credit

Parents are eligible from 24 weeks pregnant and applications can be made up until the child is 6 months old.

If the expectant mother is under 18 or 18/19 and still dependant on their parents and in full time education or training – they do not need to be in receipt of a qualifying benefit.

The Pregnancy and Baby Payment will be disregarded for UK benefit and tax credit assessments.

For information on Best Start Grant and the Pregnancy and Baby Payment you can advise families to visit or call Social Security Scotland on 0800 182 2222.

Welfare advisers can get in touch with Social Security Scotland by email at

Two child limit – non-parental care and adoption

The rules for the two child limit have been amended, following the High Court judgment given in April. The amendment ensures that a child who meets the exception for non-parental care or adoption is not counted for the purpose of the two child limit, regardless of when they joined the household. The change comes into effect from 28 November 2018. However HMRC has said that:

We will contact all Child Tax Credit (CTC) claimants who have added a third or subsequent child to their award since 6 April 2017 to advise them of the extension to support. All individuals who qualify for the extension, will receive payment for their third or subsequent child from the date the child, or children, were added to their award.

In practice, all claimants who have been affected by the two child limit will need to be asked whether any of their older children meet the exception for non-parental care or adoption.

The Child Tax Credit (Amendment) Regulations 2018


The UK government has introduced a scheme offering payments to working people on low incomes who open a new type of savings account and pay into it regularly. To be eligible for the scheme, applicants must be receiving either:

  • working tax credit (either receiving WTC, or qualify for WTC and receiving child tax credit); or
  • universal credit with earnings of at least £542.88 in the monthly assessment period before applying to open an account.

Help-to-Save accounts will last for four years. Account holders can pay in a maximum of £50 a month, which is £2,400 over four years. After two years, savers can receive a bonus of 50% of the highest balance they have saved. The maximum available in government bonus money is £1,200 in four years. The applicant’s savings in a Help-to-Save account will count as capital for means-tested benefits, but the government’s bonus payment will be ignored.

See for more information and how to apply.

Financial health checks

The Scottish Government has announced the introduction of a new service offering free ‘financial health checks’ for families, as promised in its Tackling Child Poverty Delivery Plan.

The new service is currently available through a freephone telephone number:

0800 085 7145

A face to face service has been launched in Dumfries, and Citizens Advice Bureaux across Scotland will offer financial health checks in person from January 2019.

Find out more here.


This section summarises recent decisions of the Upper Tribunal; these set a binding precedent on HMRC or DWP decision-makers and First–tier Tribunals in similar cases.

Incorrectly awarded disabled worker element cannot be renewed

This case concerned a claimant who ticked the box on the tax credits claim form as a disabled worker, and was awarded tax credits on that basis from 2008/09, which was renewed for 2009/10 and 2010/11. It was only in September 2010 that the claimant was asked for evidence of his disability, and a decision was made that he was not entitled to the disabled worker element for 2009/10 and 2010/11. It was accepted that the claimant had not acted fraudulently or negligently, which meant that it was too late to change the 2008/09 decision, so he remained entitled to the disabled worker element for that year. In this case, the Judge considered whether that gave rise to continuing entitlement to the disabled worker element under the renewal provision (Case G). However, the necessary wording includes that the claimant ‘satisfied the requirements’ of another Case ‘at some earlier time’ and found that the claimant had never actually satisfied the conditions for the disabled worker element.

“As part of its inquisitorial function, the appeal tribunal should have investigated the claimant’s case and not simply have accepted and adopted what HMRC had submitted. Pursuant to that inquisitorial jurisdiction, the tribunal should have considered entitlement under all the Cases in regulation 9 of the 2002 Regulations, of which Cases E and G were potentially engaged. (para 119).”

Read the decision in full: ABM v. HMRC [2018] UKUT 317 (AAC)


Q: What happens to universal credit if working claimants get paid early for Christmas?

My client is a lone parent in work and receiving universal credit. She usually receives her wages from her employer on the 28th of each month. Her UC assessment period starts from the 24th of each month, and she usually receives her UC on the 30th of each month. But her employer is paying early for Christmas, on the 21st December. Her next wage after that will be paid on the 28th January. She wants to know how this will affect her UC – will it also be paid early?

A: Universal credit is calculated according to wages actually received in a monthly assessment period, using HMRC’s Real Time Information from employers. This means that in your client’s case, for the assessment period that runs from 24th November to 23rd December, she will receive two lots of wages from her employer. Her UC will be reduced by 63% of her earnings above the work allowance. If she is still entitled to some UC, it won’t be paid before Christmas – as her usual payday falls on a Sunday, it will be paid on Friday 28th December. See for more information.

But receiving two lots of wages in one assessment period might mean that she is not entitled to any UC at all for the assessment period that runs from 24th November to 23rd December. If this happens, she has to reclaim UC online to be entitled again in the next assessment period. She will keep the same assessment period, so her next one will run from 24th December to 23rd January – if she doesn’t actually receive any earnings in this assessment period, then she will be entitled to her maximum UC. She can request an advance payment of UC during January.