Tax credits and early years ebulletin April 2021 | CPAG

Tax credits and early years ebulletin April 2021

Date: 
07 April 2021
Issue: 
April 2021

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IN THIS ISSUE:

Best Start grant increase
Working tax credit £500 payment
Tax credit reviews and disability benefits
Tax credit statistics
New Elearning on Scottish child payment

 

Best Start grant increase

The Best Start grant payments have increased from 1 April by 1%. The new amounts are:

  • Pregnancy and baby payment (first child) increased from £600 to £606;
  • Pregnancy and baby payment (other children) increased from £300 to £303;
  • Multiple birth supplement increased from £300 to £303;
  • Early learning payment increased from £250 to £252.50;
  • School age payment increased from £250 to £252.50.

The Scottish Ministers have a duty to consider effects of inflation, and publish a report on its findings each year. The report for 2020/21 was published in January.

Working tax credit £500 payment

The Budget on 3 March announced that the coronavirus uplift of £1,040 to the working tax credit (WTC) basic element payable in 2020/21 will not be extended for 2021/22. Instead, a one-off payment of £500 will be made to anyone who was entitled to WTC with an award of more than nil on 2 March 2021. This includes those receiving child tax credit only due to the income taper being applied to reduce WTC first, and those who are treated as in work while on furlough or impacted by coronavirus. The payment is a lump sum separate from the tax credit award, and will not affect other benefits. Payments are due to be made automatically by 23 April, with no need to apply, and are not recoverable if the recipient subsequently ceases to be entitled to tax credits.

For more information see gov.uk

Tax credit reviews and disability benefits

Tax credit rules have been amended to clarify that a tax credits decision can be reviewed at any time if a disability benefit has been awarded that affects entitlement in that tax year. A review (also known as a mandatory reconsideration) must be requested within one month of the date of the decision on the disability benefit. This applies to any tax credits decision, including old decisions even if the claimant is no longer getting tax credits. A request for a review of a tax credits decision following an award of a disability benefit does not have to be in writing, and can be made by phone to the Tax Credits Helpline.

The disability benefit will most commonly be:

  • personal independence payment (PIP) for an adult, giving rise to entitlement to working tax credit as a disabled worker, and the disabled worker element; or
  • disability living allowance (DLA) for a child

The decision on the disability benefit could be following a mandatory reconsideration or appeal, which in some cases can result in the disability benefit being backdated several years, consequently the tax credits decision can also be backdated several years.

HMRC must review the decision as soon as is reasonable, and may request further information or evidence. The sole purpose of the review is to consider whether the decision should be changed as a result of the award of the disability benefit. The outcome of the review must be notified and there is a right of appeal against the new decision.

See The Tax Credits Reviews and Appeals (Amendment) Order 2021

Tax credit statistics

HMRC recently published statistics for tax credit awards in 2020/21, showing the impact of the coronavirus pandemic, which caused a move to universal credit, but also moved some tax credit claimants from nil awards into payment.

As at 2nd December 2020, there were approximately:

  • 1.99m families claiming Child Tax Credit (CTC) and/or Working Tax Credit (WTC). This is a fall of approximately 492,000 when compared to a year earlier.
  • 3.6m children in tax credit claiming families. This is a fall of approximately 1.02m when compared to a year earlier.

Full statistics available here

Elearning

We have just launched a new and free elearning course, Scottish child payment aimed to equip staff in frontline agencies with knowledge and skills to help their clients access Scottish child payment. Everyone working with families, whether in health, education, childcare or voluntary sector, can play a part in spreading the word about Scottish child payment, to help make sure as many eligible families apply as possible. You can work at your own pace at a time that suits, saving your progress as you go.

There are a number of free elearning courses which can be viewed here.