I have someone who is working, and payments are made for CTC and WTC. Partner was in receipt of SDA in 2001/02, so this would not have counted as income. Switched to Incapacity Benefit in 2002/03, although little change in amount. Would new Incapacity Benefit be taxable and therefore count as income (with potential tax credit overpayment)? Any comments welcome.

Although I haven't yet had to advise a client on this point,I see that CPAG p 1349 says that only short-term lower rate Incapacity Benefit is ignored.

It also says that short-term higher rate IB and longterm rate IB both count in full as income for Tax Credit purposes - but *transitional* longterm IB, paid since before the 1995 changes, is ignored.

(The list also says 'ex gratia' supplements to IB for those over pension age are ignored.)

Hope that helps.