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Forum Home  →  Discussion  →  Income support, JSA and tax credits  →  Thread

DWP/HMRC data-feed broken for 3 Years - at least 28,000 families missed out on CTC Disabled Child Elements…

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Jon Blackwell
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From the Autumn Statement Costings at p33

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/571402/Policy_Costings_AS_2016_web_final.pdf

A higher level of Child Tax Credit (CTC) is awarded to families with disabled children for whom
Disability Living Allowance (DLA) is paid. It is the customer’s responsibility to inform HMRC that
they receive DLA for their child. However it is HMRC’s practice to take data from Department for
Work and Pensions (DWP) about such children and update the customer’s CTC awards
automatically.

There was a gap in the data-feed between DWP and HMRC during 2011-14 and because of this
around 28,000 families in 2016-17 are not receiving the higher level of CTC which reflects their
receipt of DLA.

( This problem may be well-known but it was news to me…)

The statement implies no chance of backdating -  is there any hope of extra-statutory compensation for earlier years ( and for those no longer getting CTC) ?

Also, does this “data-feed” work for UC?

 

Daphne
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At para 5.9 of the full statement - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/571559/autumn_statement_2016_web.pdf - it says -

HMRC will make in-year award adjustments so the disability elements of
Child Tax Credit will be paid to a group of recipients who are eligible, but not currently receiving this entitlement.

it looks like this will address the situation for this year but nothing about previous years? From the costings document -

This measure will be an in-year adjustment to pay the higher level of Child Tax Credit (CTC) to these families for this financial year, from 6 April 2016. Payments will continue in future years for as long as the families remain eligible.

I guess they will say it was the claimant’s responsibility to notify…

No idea about UC - a question to put to them - I’ll send something to the contact I have…

[ Edited: 23 Nov 2016 at 02:32 pm by Daphne ]
stevenmcavoy
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i had a tribunal on this very issue.

client got a benefit check from me and i noticed elements missing for several years. we went through all the stages for a backdate and ended up at tribunal.  hmrc were contending could only backdate one month.

at appeal i had two arguments.

1. backdate should be allowed to start of tax year.  this was based on the regs allowing decision makers/tribunal to review in year before the final entitlement decision is made.
2. a 5 year backdate as thats the limit in tax credit cases

after much ado (including me being accused of prompting my client to tell lies) hmrc accepted the client had notified the dla award on the phone. they initially denied this.  unfortunately my client was caught out by a part of the regs that say she cant have materially contributed to the error and the tribunal ultimately felt this was the case as the client hadnt picked up on it in her provisional notice (there was case law to back this up unfortunately.

on the plus side hmrc conceded my first argument (on the day of the 3rd hearing) so she at least got about half the years element backdated but overall she had lost a fortune due to hmrc’s mistake.

Tim Blackwell
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nickgosh
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Hi, I run the Citizens Advice Service at Great Ormond Street Children’s Hospital - this is certainly not news to us and has been an almost daily occurrence for several years.

It is even worse than first appears, The DWP removed (w e have never been given a reason why?) the questions from the DLA form which capture who is getting CTC for some years and although this question was reinstated a few years back. Our recent FOI request to HMRC revealed that they still ‘rarely receive’ this data although when they do it is acted on.

We have been running a complaint based on a total failure by both DWP and HMRC to provide information to families that they need to inform HMRC of a DLA decision wtihin 28 days to get more than 1 month backdating of disabled child elements. This is currently with the Operational Excellence Committee and has been there for some months ‘waiting for HMRC solicitors’ to make a decision and I m guessing that this has now been made and that we will take to ICE.

For HMRC to, argue ‘claimants responsibility is perverse when families have no information of this time limit.. Of course even the best and most capable of us might fail to act in time if we were under the type of stress that having a severely/ill disabled child in hospital causes.

The Money Box programme suggested that there is no legal challenge however I am thinking there might be something around the Public Sector Equality Duty? - at very least a failure to promote the best interests of disabled people? - Anyone have any ideas if this might be a runner?

[ Edited: 28 Nov 2016 at 09:01 am by Daphne ]
nickgosh
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C Hammersley
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We have been pursuing this issue (with Bernie OGorman, Hertfordshire Welfare Rights) for the last couple of years via the HMRC Benefits & Credits Consultation Group. My colleague Jane referred to it here:

http://www.rightsnet.org.uk/forums/viewthread/7138/

Just prior to the announcement in the Autumn Statement, HMRC confirmed this news via a teleconference. They confirmed that they are backdating the award for identified claimants to April 2016 using ‘in-year enquiry powers’.  They state that they do not have the legal powers to go back further. Parents should receive the backdating in a lump sum payment, and the disabled child addition as part of their on-going award.

The scan which identified the 28,000 cases was undertaken in January 2016 though, so there could be a few which are missed if DLA has been awarded since then. HMRC are open to hearing about these cases though - if you come across any HMRC are happy to look at them, you can send a message if you would like us to raise them.

Re the notification from DWP to HMRC, they have received 300,000 notifications per year since 2014 when the CTC question was added back to the DLA form, they are confident that it is now working properly… By contrast, they received 100,000 notifications per year in the period when the question wasn’t on the form.

Mark Willis
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Just as a footnote, they do have the legal powers to go back further, but they have decided not to use them. The ‘in-year enquiry’ for current year 2016/17 is actually a section 16 revision. The decision for 2015/16 can be revised under section 19 of the Tax Credits Act by opening an enquiry into the award. The decisions for 2014/15, 2013/14, 2012/13 and 2011/12 could be revised under section 20, as they could be said to be incorrect due to claimant neglect. If the situation was the other way round, and claimants had been overpaid, the decisions would be revised in this way, but there is nothing to say these powers cannot be used in the claimant’s favour if HMRC so chooses. Caselaw found similar cases were not an official error so arguing they should use their power under section 21 seems difficult.

Of course they could also pay compensation so also worth making complaints

Mark

LITRG
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That’s an excellent summary Mark.

Nick - do you have link to the FOI request and the answer you received? I looked up the current form and a one from 2013 and the question about CTC interest is missing on the 2013 version. What I haven’t seen is the text of the DLA notification letter and notes yet.

Victoria

 

nickgosh
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Hi Victoria,

I have a series of HMRC and DWP letters setting out how customers would know to inform HMRC of DLA award - none of which mentions a 30 day time limit to do so.

I will additionally send our replies along with the FOI tomorrow - will have to anon first.

Complaint - whose son died this weekend - is with adjudicator and will shortly be with ICE too

Mark Willis
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The caselaw I was thinking of was AM v HMRC [2015] UKUT 345 (AAC)

On closer inspection, HMRC did agree before the hearing to go back to the previous year because when the final decision was made, it had the information before it that the award was wrong (paras 27 & 28) – this should also apply in these cases because the data-matching exercise was undertaken in January 2016 and the final decisions for 2015/16 were made in August 2016. So a late MR of final decision is worth a try.

Mark

stevenmcavoy
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Mark Willis - 28 November 2016 02:02 PM

Just as a footnote, they do have the legal powers to go back further, but they have decided not to use them. The ‘in-year enquiry’ for current year 2016/17 is actually a section 16 revision. The decision for 2015/16 can be revised under section 19 of the Tax Credits Act by opening an enquiry into the award. The decisions for 2014/15, 2013/14, 2012/13 and 2011/12 could be revised under section 20, as they could be said to be incorrect due to claimant neglect. If the situation was the other way round, and claimants had been overpaid, the decisions would be revised in this way, but there is nothing to say these powers cannot be used in the claimant’s favour if HMRC so chooses. Caselaw found similar cases were not an official error so arguing they should use their power under section 21 seems difficult.

Of course they could also pay compensation so also worth making complaints

Mark

i went down the official error route in my case.  i had read the case you qoute in your next post so knew we were struggling but i argued that the client had a history of notifying changes in circs by phone as she struggled with the letters and forms and that clients should be able to rely on a public body to administrate their claim properly if they double checked everything this way.  didnt work.

i never seen the claimant neglect reg considered in any of the caselaw so didnt pick up that could be a route either.  i wonder if anyone has tried this with any success?

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victoriatodd - 28 November 2016 03:34 PM

That’s an excellent summary Mark.

Nick - do you have link to the FOI request and the answer you received? I looked up the current form and a one from 2013 and the question about CTC interest is missing on the 2013 version. What I haven’t seen is the text of the DLA notification letter and notes yet.

Victoria


I have attached the FOI and a letter from DWP which sets out how they consider customers would know they needed to inform HMRC within the time limit - there is nothing much in the DLA award letter other than to seek advice, my opinion is it is the DLA award letter which should provide ‘advice’ and information - right time and place but apparently too expensive to include…...

I have now received the HMRC submission to the adjudicator - most of the web based information they provide is poor to say the least although the information in the award and review letters is better - however no clear information as to the time limit to inform and of course we now have evidence that 28,000 families failed to understand from the information provided as to what they needed to do as part of their claimant responsibility so certainly my complaint clients were not the only ones

I am hoping if a positive result from adjudicator or ICE then this whole issue can be progressed further

Nick

[ Edited: 29 Nov 2016 at 04:19 pm by shawn mach ]
shawn mach
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nickgosh - 29 November 2016 04:02 PM

I have attached the FOI and a letter from DWP ....

Sorry, Nick, doesn’t look like the attachments came through .. can you try again?

nickgosh
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hopefully attached

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nickgosh
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Hi we were looking over some of our previous work on this topic and discovered a communication from DWP from 2014 about why the question regarding tax credit had been removed from the DLA form.

“With regard to the reason for the tax credit being removed from the DLA claim form and being reinstated, in 2010 we were assured that the CIS interface automatically picked up child awards in all cases. This included cases where the parent/guardian claimed DLA for the child and their partner claimed IS or tax credits with the children as dependants. In 2014 staff at DLA Child unit said this doesn’t happen for partners and asked for the tax credit/income support question to be put back in the form. It is therefore important that when claiming DLA for a child the tax credit question is answered.”