Arrears of CTC disabled child element following migration to UC

Client on ESA was also in receipt of CTC for 2017-18. Made a claim for DLA iro her child in Aug 17. DLA refused and MR/appealed.

During the appeal process client naturally migrated to UC (Nov 17). At subsequent tribunal hearing DLA awarded from the date of claim (i.e. before migration).

As far as we have been able to establish the award of TC for 2017-18 has been finalised under TCA s18 (presumably under the ‘part tax year’ provisions introduced by UC(TP)Reg. 12A).

Client reports the award of DLA to HMRC within one month so has complied with TC(CN)Reg. 26A

Award of DLA would trigger a TCA s15 revision because it will increase the maximum CTC payable and is notified within the time limit in TC(CN)Reg. 26A.

However s15 only refers to revision of ‘awards’ not ‘entitlement’. So does s15 (like s16) only provide a power to revise ‘in year’ and not once entitlement has been determined under s17 & 18?

So under what provision can HMRC now ‘re-open’ the CTC entitlement for 17-18 and award the arrears of the disabled child element. Can notification of the COC trigger HMRC’s ‘power to enquire’ under TCA s19 (and in practice will they do so).

Where there is a continuing award of TC (although for a subsequent tax year) in our experience there is not normally a problem with HMRC ‘backdating’ an element to the appropriate date in a previous tax year.

However I am stuggling to see the statutory basis on which the arrears for a previous tax year can now be paid when that year is already ‘finalised’ and claimant has migrated to UC. I cannot locate any HMRC guidance on the issue either.

Victoria, Mark?

Of course client will also be worse off under UC due to the lower rate of disabled child element! And we have the joy of getting her ESA revised for a carer premium once CA is in award!

Simplification.

Hi Peter

I can’t think of much to add really, you’ve answered the questions there. I agree section 15 relates to award so would only apply in year. I think that leaves you with requesting a late MR of the section 18 final decision, presumably made around Nov 17 under the part year provisions, and/or asking HMRC to open a section 19 enquiry into this decision - or section 21 official error. They may take some persuading to do so but it seems a strong case as the claimant has done nothing wrong, and could not really have done anything different here, and has lost out simply because of the roll out of UC. A refusal to revise on these grounds is arguably appealable.

It might also be worth talking to our legal team in London about the lack of transitional protection for disabled children in this situation http://www.cpag.org.uk/content/universal-credit-disability-and-transitional-protection

and as I’m sure you know Contact have been campaigning strongly on this point. https://contact.org.uk/get-involved/campaigns-research/universal-credit/

Cheers

Mark

Mark Willis - 16 August 2018 03:17 PM

Hi Peter

I can’t think of much to add really, you’ve answered the questions there. I agree section 15 relates to award so would only apply in year. I think that leaves you with requesting a late MR of the section 18 final decision, presumably made around Nov 17 under the part year provisions, and/or asking HMRC to open a section 19 enquiry into this decision - or section 21 official error. They may take some persuading to do so but it seems a strong case as the claimant has done nothing wrong, and could not really have done anything different here, and has lost out simply because of the roll out of UC. A refusal to revise on these grounds is arguably appealable.

It might also be worth talking to our legal team in London about the lack of transitional protection for disabled children in this situation http://www.cpag.org.uk/content/universal-credit-disability-and-transitional-protection

and as I’m sure you know Contact have been campaigning strongly on this point. https://contact.org.uk/get-involved/campaigns-research/universal-credit/

Cheers

Mark

Hi Mark

I spoke to the intermidiaries line earlier today who were quite helpful. They say (as the claim was ‘finalised’ in March under the UC ‘part year’ provision) that the entitlement will be ‘re-finalised’ based on the COC (although they couldn’t point to the legislative basis).

Apparently this is done by the JET team which I think are the people who instigate the IT work arounds for these kinds of issues. The person I spoke to said that they are now seeing a lot of these ‘arrears’ issues and seemed quite familiar with it. We shall see if client gets the arrears without any fuss!

We will contact Carla - my understanding is that the lower rate of disabled child element in UC is one of the issues raised in IM, TD & AD which is awaitng hearing.