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

Disability element after starting work when long term ESA claim ended

Nick L
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(i)Future Money Team (ii) Talking Money - Bristol

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Joined: 20 January 2016

Hi All,

Hopefully somebody can help me to work out whether I should be taking a negative decision regarding a client’s entitlement to the disability element of Working Tax Credits to tribunal and what argument I might frame.

The client failed a WCA in May 2016 after being on ESA for 3 years (was in WRAG group before WCA failure), she didn’t want to appeal the ESA decision and started working 25 hours per week in August ‘16 as she felt she was being forced into work. She then claimed WTC because she was a single parent with a child still in education and she was working more than 16 hours per week. That child finished education in September ‘16 and all tax credits stopped because she wasn’t working the 30 hours per week to still qualify as a single person.

She saw us in January where we pointed out that when she claimed Working Tax Credits she should have also been and should still be getting the disability element of tax credits because she’d started working more than 16 hours per week less than 26 weeks after her ESA claim ended. Therefore when her son finished education her CTC should indeed stop but the disability element of WTC should continue.

The client has struggled massively with her depression and anxiety alongside a stomach issue that she had surgery on last year since returning to work.

We completed a mandatory reconsideration in February ‘17 in to the decision to finish the award when the child ended education in August where we directed them to the above information. In the MRN they have said they wouldn’t overturn their decision because “Unfortunately, as your disability was not mentioned when you advised us that you had commenced employment it is too late to consider this now”.

They cited this regulations in making their decision:
The Working Tax Credit (Entitlement and Maximum rate) Regulations 2002, Reg 4.

I don’t see how a claimant could be expected to know that they should mention to tax credits that in fact they started working because they have a disability but their ESA claim recently ended. We also made a new claim and requested the date of award be revised to the date she started work but no award at all was made.

Does anybody have any thoughts as to whether we should appeal further and what regulations might support that?

Thanks in advance,

Nick

 

Damian
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Welfare rights officer - Salford Welfare Rights Service

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Deffo appeal. There is a problem where someone is on CTC and claims WTC. The HMRC staff don’t know what questions to ask to decide entitlement to the disability element. Here is the guts of a submission I did for an appeal on this issue (successful) which has some references in it. Sorry its a bit of a clumsy way of doing it but I’m pushed for time. Hope it helps:

The number of tax credits

S1(1) of The Tax Credit Act (TCA) identifies 2 distinct tax credits: working tax credit and child tax credit.

The requirement for a claim

S3 of the TCA provides that “Entitlement to a tax credit for the whole or part of a year is dependent on making a claim for it”

Thus each individual tax credit requires a specific claim for it.

How claims can be made

S4 of the TCA provides a power for regulations to be made prescribing how claims are made. This power was exercised in making in regulation 5 of the Tax Credits (Claims and Notifications) Regs 2002 (TC(C&N)Regs) which provides that

“(2) A claim must be made….

(a) In writing on a form approved or authorised by the Board for the purpose of the claim
(b) In such other manner as the Board may decide having regard to all the circumstances

Adjudication process in this case

On 27th August 2013 Mrs XXXX contacted the Tax Credit Office to claim Working Tax Credit. On the basis of this contact Mrs XXXX was awarded Working Tax Credit. That contact must therefore be taken as having ben accepted as a claim in accordance with reg 5(2)(b) of the TC(C&N) Regs.

The extent of the information recorded by the HMRC contact centre was 5 words and a date:

“Cust started work 23-08-2013 NTC updated”

Working tax credit was awarded but no disabled worker element was awarded.

In paragraph 14 of section 5 of the submission from HMRC they state that “prior to 14th July HMRC was unaware that Mrs XXXX was disabled and that she had been receiving ESA”

They then state in para 16 that “29th July 2014 was taken as the date of first notification that Mrs XXXX was eligible to the disability element of working tax credit”

There is then a reference in para 17 to provisions limiting backdating of an increase in the rate of tax credits based on the date of notification in cases where a claimants circumstances have changed. Whilst the submission does not indicate where this provisions is found it appears to be a reference to the provisions in part III of the TC(C&N)Regs and regulation 25 in particular.

In looking to these regulations HMRC have taken the wrong approach. There was no change of circumstances where entitlement to the disability element is concerned. Mrs XXXX’s entitlement to the disability element arose at the date she claimed working tax credit. It was at that stage that entitlement should have been detected by the person taking the claim on the telephone.

The role of the claimant and the adjudicating authorities was considered by the House of Lords in Kerr v DSD in the bundle at pp 43 – 65.  The repsponsibilities of the parties was summed up by Baroness Hale at paragraph 58 “the system places the burden upon the department of asking the right questions and on the claimant of answering them as best he can”. This is expanded at para 62 “What emerges from this is a cooperative process of investigation in which both the claimant and the department play there part. The department is the one which knows what questions it needs to ask and what information it needs to have in order to determine whether the conditions of entitlement have been met. The claimant is the one who generally speaking can and must provide that information.” Whilst this concerned a social security benefit I submit that the principles apply equally to benefits administered by HMRC.

Applying these principles in the present case what has gone wrong appears to have been that HMRC failed in it role of asking the right questions. Through not asking the necessary questions in order to determine whether Mrs XXXX was entitled to the disability element HMRC ended up with insufficient information to realise that Mrs XXXX met the conditions of entitlement to that element and therefore mistakenly did not include it in her award.

Nick L
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(i)Future Money Team (ii) Talking Money - Bristol

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Brilliant thank you Damian