Cl. had twins 31 March. HB/CTB increase as a result just received. This includes CB as income (although Cl. has not yet got CB), but not CTC. Cl. will not get CTC till after CB has been processed; CTC will then be paid from DoB of twins.

I assume the LA will re-assess HB/CTB when the CTC amount is known, reduce it from the DoB & create an overpayment. However, I find the information in CPAG (p. 861 & 921) rather confusing - it seems to imply the backdated payment might be treated as capital, unless I have misread it. Is my assumption correct please?

Also, Cl. is being underpaid SMP by employer & HB/CTB is based on what she is receiving rather than the correct entitlement. When this is corrected she should get a back payment from employer. Will this also result in re-assessment of HB/CTB from the date underpayment started?

Arrears of CTC are treated as capital and the first & subsequent "normal" payments are then taken into account as income.

HBR 32 provides how Tax Credit income must be assessed.

HBR 46(9) provides that arrears of Tax Credits SHALL be treated as capital.

Many thanks - very helpful.