CTC on leaving education

Wonder if anyone has come across this? Colleague who does financial assessments for young people at the transition stage from children’s to adult care has had two cases in the last month where the parent has been told by TC helpline that they will continue to pay CTC until September to a 19 year old leaving school this month and not continuing in education in any way. She’s advised the parent in both cases this is incorrect but (not unnaturally) they prefer the TC advice as the CTC is considerably more than ESA will be.

May just be isolated cases but I said I would ask if it’s happening elsewhere.

Unless I’m missing something (very possible), I think this is because they will pay it up to the ‘terminal date’ when the QYP leaves education and the terminal date depends on when the QYP/child leaves within the year. The terminal date at this point in the year is the 31st of August (which lines up with what they said).

CPAG p575 goes into more detail

Rebecca

My understanding is that the terminal date rule can only apply to CTC where the YP is under 18. Child Benefit can be paid up to the beginning of September but not CTC so in general parents are better off ending the Child Ben claim so the YP can claim ESA.

Well I had indeed missed something there 😊 that wasn’t very helpful!

No worries - looks like HMRC are missing it too!

I think you’re right in that the terminal date will not apply in these circs, however CTC would still continue to be paid until the 31 Aug after the 19th birthday (where the QYP has been in full time education since before they turned 19). See CPAG p183.

These are young people who are leaving education aged 19 so I think that doesn’t apply?

Hi all

See CPAG handbook, Chapter 9: Child tax credit, about half way down page 183:

“Note: there is no equivalent to the child benefit ‘terminal date rule’ (see pa 575) so, unless the young person is under 18 and the rule in the next bullet point applies, s/he cannot count as a child once the course or training ends.”

The next bullet point covers the CB extension period for 16/17 year olds.

The rule relating to 19 year olds is for those who are still in education or training, and whether they enrolled or were accepted before 19.

Footnote 7 refers to the Child Tax Credit Regulations, Regulation 5. This uses the term “receiving full-time education, not being advanced education or…by virtue of employment…”. Regulation 5(5) goes on to say “...shall include gaps between the ending of one course and the commencement of another, where the person enrols on and commences the latter course.” 

In practice, HMRC’s interpretation of when a young person has stopped “receiving education” appears to vary. See Tax Credit Technical Manual https://www.gov.uk/hmrc-internal-manuals/tax-credits-technical-manual/tctm02230 :

“Note: Where a qualifying young person intends to continue their full-time education but at advanced level CTC can be paid to:
•the last day of the academic year (31 August)
or
•if before 31 August, the date the young person changed their mind and decided not to continue their education

Example
A claimant telephones on 27 August to inform tax credits that her daughter has found work.  The claimant states that although her daughter had originally intended to go to university, following her exam results she had decided to look for a job instead and has now found work.  She is asked what date her daughter made the decision to look for work and not go to university.  This date is given as the 21 August.  CTC can therefore be paid to the 20 August.”

The key point from the claimant’s point of view is to make sure that Tax Credits Office is kept notified what the course is and when it ends.  If HMRC continue to pay in this situation after being notified, and it is later decided that it was an overpayment, it should not be recovered.

Mark