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UC v Tax credits for lone parent Full time student


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Coventry University Advice Centre

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Joined: 11 March 2011

My client became a full time student in September.  Prior to this she was in receipt of full benefit with a child aged 6. Due to the change in circumstances, she was encouraged to claim UC by the benefits agency.  She is in a transitional area, Hinkley,  We are not in transition yet in Coventry and we lack training and experience in this area,  Therefore your assistance is much appreciated.

She is not entitled to any UC (in term time)... this means she has lost her eligibility to tax credits which would of continued as lone parent student, her only income in her student finance.

She has (surprisingly) successfully had her UC application closed, however on calling tax credits they have said she is no longer entitled and will not consider reinstating her previous claim and categorically state that she must claim UC.. which she inst entitled to.  She doesn’t have a decision they just wont let her claim.

Therefore how do we tackle this, is it a mandatory reconsideration? or a dispute?  Is there something else we should be doing?

Am i wrong in expecting that tax credits are payable in these circumstances?

Mark Willis
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Welfare Rights Worker, CPAG in Scotland

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Joined: 17 June 2010

Hi Justine

Under the Universal Credit (Transitional Provisions) 2014 Reg 8(1), the tax credit award stops if a claim for universal credit is made; and the DWP is satisfied that the claimant meets the basic conditions for UC in section 4(1)(a) to (d) of the Act. 
One of the basic conditions is ‘not receiving education’ but then claimant with a child does not have to meet that condition. Under 8(2)(b), tax credits are terminated even if the claimant is not entitled to universal credit due to income. (CPAG handbook p.1464)

In some cases, it may be possible to withdraw a UC claim before the DWP has had the opportunity to satisfy itself that the basic conditions are met. But from what you have said it sounds like a decision was made on entitlement to UC due to income.

I take it Hinckley is a full service area. Once the full service has been introduced then tax credits are abolished under the relevant commencement order (see article 6 ) and it is not possible to make a new claim unless claimant or partner is over PC age, or has three or more children. (CPAG handbook p1450)

A mandatory reconsideration/appeal of the decision to terminate tax credits would seem difficult as the decision appears to have been made correctly according to the law, so a judicial review of HMRC action may be the only remedy in these circumstances along lines of but invoking human rights/rights of child arguments or complaint/compensation against DWP as claimant with child has lost CTC worth up to £3,325 a year (for however many years would have been eligible) due to DWP advice to claim UC. Try our London advice line to discuss or refer on to a solicitor.