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Childcare element of WTC not disregarded while receiving MA
My client’s LA is counting the childcare element of WTC as income in her HB claim because she was not in employment immediately before she started receiving Maternity Allowance.
Her employment ended on 20 March and her MA started on 7 April. EWC started on 21 June.
Reg 5 of WTC (EMR) Regs says:
“5. For the purposes of the second and fourth conditions in regulation 4(1) a woman is treated as engaged in qualifying remunerative work for the requisite number of hours during any period for which maternity allowance or statutory maternity pay is paid to her; if she was so engaged (under a contract of service or a contract for services) immediately before the time when that payment began.”
What does ‘immediately before’ mean in this reg, e.g. one week before? Her employment had actually ended before she started getting MA payments.
Although this client is treated as in full-time work for WTCs (Reg 7D WTC (EMR) regs), this doesn’t seem to transfer to HB due to Reg 6 of the HB Regs and her not being classed as undertaking ‘remunerative work’ in the week before her MA payments started.
The result is that the childcare element of WTCs is counted as income in her HB.
It seems slightly odd to me that WTCs class her as in full-time work but HB doesn’t, so let me know I’ve misunderstood this somewhere along the line.
We’ve come across this recently in a similar scenario whereby one of the couple was claiming carer’s allowance rather than being on maternity leave.
The Working Tax Credit (WTC) rules do, as you note, allow a couple to qualify for an increase in their WTC for childcare costs through the inclusion of a childcare element when one is in remunerative full time work and the other is not but is entitled to MA
However, regulation 28 of the Housing Benefit Regulations 2006 was not amended to enable such a couple to qualify for a deduction for childcare costs under regulation 27(1)(c) which deals with the calculation of income for housing benefit. Thus the amount of the WTC childcare costs element will be taken into account in full for housing benefit purposes I’m afraid.
In your case, it’s even worse to an extent, because, in relation to “remunerative work”, reg.6(7) of HB regs explicitly precludes someone on maternity leave from being treated as in remunerative work.
CPAG did apparently query this at the time of the original amendments being made and we were given to understand that this was not an omission and that the government was aware of the potential consequences. Further, I’ve discussed this issue with colleagues and as unjustified as this appears to be, we’re struggling to find any grounds for a possible test case being taken forwards.
Can I bump this to ask a slightly different question?
An LA is not disregarding childcare costs for a period when the tenant was on maternity leave for 4 weeks before returning to work. Tenant is a single parent who was working immediately before going on ML and has been in receipt of maternity pay. In preparation for her return to work she arranged new childcare so there is a period of 4 weeks where WTC includes childcare costs but tenant is still on ML.
My understanding is that in these circumstances she IS treated as being in remunerative work and the childcare costs can be disregarded from HB or am I missing something from the circumstances that makes the LA decsion correct?
My understanding is that in these circumstances she IS treated as being in remunerative work and the childcare costs can be disregarded from HB or am I missing something from the circumstances that makes the LA decsion correct?
No you are not, point them toward regulation 28(14) of the HB regs 2006.