Tax credits and early years e-bulletin December 2019 | CPAG

Tax credits and early years e-bulletin December 2019

10 December 2019

Our 2019/2020 Training and Publications brochure is available. We are running the following course, also available in-house, which is particularly relevant to early years workers:

Other courses coming up in January that may be of interest:


The following factsheets on financial help for families have been updated and are available to download from our website:

We have a limited printed supply of these factsheets. If you would like to receive printed copies please email


The Scottish Government has published its latest statistics for the Best Start grant, which show:

  • 93% of applications received by 30 September were made online
  • 36,750 (38%) were for the Pregnancy and Baby Payment
  • 32,805 (34%) were for the Early Learning Payment
  • 19,645 (20%) were for the School Age Payment
  • 13,115 (14%) for Best Start Foods.
  • 74% of Pregnancy and Baby payment applications were awarded for subsequent births, compared to 38% for first births. This may be because clients applying for their first child are less likely to be already on a qualifying benefit, particularly if the application was received before the birth of their baby – but they should be advised to re-apply if they become entitled to UC within 6 months of the birth.
  • Three quarters (68,055, 75%) of the applications that were received since December 2018 and decided by 30 September 2019 were processed within 10 working days. Around 9% of all applications took 21 days or more to be processed

The Social Security Chamber First-tier Tribunal for Scotland hears appeals about devolved benefits, including the Best Start grant. Individual decisions will not be published by the Chamber, but there will be updates on matters of interest and points of law arising in decisions. So far these have shown:

Confusion over when to apply for a School Age payment, as almost all appeals concerned children whose entry to school was deferred for a year. The application can be made whether or not the child has started school but must be made within the application window, (currently open for children born from 1 March 2014 to 28 February 2015).

Most appeals were about applications received outside the time limit. The Tribunal has no power to extend the time limit or to consider whether the result of the application of the law is fair.

The other issue that has arisen more than once is about financial need. The Tribunal can only decide whether the conditions laid down in the law are met and has no other powers.

Four of the first five appellants opted for their appeals to be paper cases and one was offered the opportunity to attend a hearing at a Tribunal Centre or alternatively to explain her point of view to the Convenor by telephone, which she preferred.

See report for more detail.


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.

Child living in another EU member state

The claimant had been getting child tax credit (CTC) since March 2016 for his daughter, who had been living in Spain for about nine years. The claimant was a UK national who had never lived or worked in any other country than the UK, and had only gone abroad on visits. His daughter visited him about eight or nine times a year, and he regularly sent her money, clothes and other items. HMRC had originally awarded CTC but stopped the award when it decided that the UK was no longer the competent state to pay family benefits. The claimant appealed on the basis that he was entitled to rely on EU law to be treated as having his daughter living with him. The First-tier Tribunal upheld HMRC’s decision, and the claimant appealed to the Upper Tribunal. It was only at this stage that HMRC examined whether the claimant should ever have been entitled to CTC in the first place. Judge Jacobs found that:

  • The claimant is not entitled to CTC in domestic law because his daughter does not normally live with him – she is living and being educated in Spain, and only visits the claimant.
  • HMRC was wrong to say that EU rights were only acquired as a result of exercising the right of free movement between States under Directive 2004/38. For the purposes of Regulation (EC) 883/2004 it is sufficient for the claimant to have been subject to the legislation of just one Member State.
  • Reg 883/2004 Article 67 provides “A person shall be entitled to family benefits in accordance with the legislation of the competent member state, including for his family members residing in another member state, as if they were residing in the former member state.”
  • EU law does not help this claimant because it only bypasses a domestic residence condition, allowing the child to be treated as residing in the UK; it does not bypass other domestic conditions of entitlement for CTC, such as the requirement for the child to be normally living with the claimant.
  • The definition of family member in EU law would deem the daughter to be living with the claimant, but only if she were ‘mainly dependent’ on him – and this condition was not satisfied in the circumstances, taking into account the level of financial and other support.

The outcome in this case was that the claimant was never entitled to CTC for his daughter in Spain. HMRC acknowledged that the claimant had always correctly reported the arrangements for his daughter, and was not responsible for the mistakes, so would not be required to repay any overpayment of tax credits.

NB: The claimant had also been awarded child benefit, which Judge Jacobs confirms is governed by different rules from CTC (there is no ‘normally living with’ test, but the claimant must be contributing at least the amount of child benefit to support the child).

Read the decision in full: RI v HMRC (TC): [2019] UKUT 306 (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 25th of each month. Her UC assessment period starts from the 21st of each month, and she usually receives her UC on the 28th of each month. But her employer is paying early for Christmas, on the 19th December, so she will receive two lots of wages in one assessment period. She wants to know how this will affect her UC – and will it also be paid early?

A: Universal credit for people in work is usually calculated according to wages as notified by HMRC’s Real Time Information (RTI) from employers. New HMRC guidance (page 4) tells employers that Christmas wages paid early should be reported for RTI as though paid on the normal payday. This will help to protect your client’s eligibility for Universal Credit, so that only one lot of wages will be counted for this assessment period.

This guidance should be brought to the attention of employers, as there is no guarantee they will be aware of it.

UC won’t be paid early for Christmas – as her usual UC payday falls on a Saturday, it will be paid on the working day before that – Friday 27th December.

See for more information.