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Forum Home  →  Discussion  →  Covid-19: Welfare benefit issues  →  Thread

Will the shutdown force people onto UC?

Dan Manville
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Greater Manchester Law Centre

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If people are laid off or their hours drop below 16 thanks to the shutdown, then 4 weeks later their WTC should stop.

I haven’t heard any measures to prevent that. It’ll create a surge of people needing to naturally migrate.

I don’t think that’s on!

LITRG
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Head of Low Incomes Tax Reform Group

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We are putting together a list of tax credit issues to take to HMRC but one of them is around when an hours drop is a change of circs. The guidance used to be that you effectively got 8 weeks if you were laid off - 4 weeks when HMRC treated you as still ‘normally’ working the required hours and then the 4 week run-on. We are trying to seeking clarification on the first 4 week period as GOV.UK isn’t clear on the point

(see for example Page 5 of WTC7 in 2010 https://revenuebenefits.org.uk/pdf/WTC_7_may_2010.pdf)

Victoria

Charles
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Accountant, Haffner Hoff Ltd, Manchester

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HMRC have a recorded message on the helpline that the first 4 week period has been extended to 8 weeks, so a total of 12 weeks including the run-on.

The adviser told me that if claimants continue paying childcare, the same rule will apply to that even though the provider is shut.

LITRG
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Head of Low Incomes Tax Reform Group

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Charles - 19 March 2020 06:03 PM

HMRC have a recorded message on the helpline that the first 4 week period has been extended to 8 weeks, so a total of 12 weeks including the run-on.

The adviser told me that if claimants continue paying childcare, the same rule will apply to that even though the provider is shut.

Would be helpful if they published this info!

Victoria

Charles
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Accountant, Haffner Hoff Ltd, Manchester

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Just called again, and this adviser told me there hasn’t been anything published yet, and they’re just working off emails which have been sent round.

He told me the position is different: 1) the 8 weeks mentioned on the recorded message DOES include the 4 week run-on, and 2) the childcare rule is indefinite, and not just for 8 weeks - obviously only if the claimant continues paying.

LITRG
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Head of Low Incomes Tax Reform Group

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Charles - 19 March 2020 06:22 PM

Just called again, and this adviser told me there hasn’t been anything published yet, and they’re just working off emails which have been sent round.

He told me the position is different: 1) the 8 weeks mentioned on the recorded message DOES include the 4 week run-on, and 2) the childcare rule is indefinite, and not just for 8 weeks - obviously only if the claimant continues paying.

I’ve reached out to HMRC policy and will be speaking to them tomorrow. We’ll publish info as soon as we get it.

On the childcare - i guess the issue will be if you fall foul of the remunerative work rules but then have to keep paying childcare. So many scenarios are coming to us with people doing different things. They will need to flex the rules.

Victoria

Liz W
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Welfare Benefits Unit, York

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Hi. I’ve rung the Tax Credit Intermediary line today about the impact on workers who have been sent home from work on nil pay due to Covid-19. They advised that those that remain in employment (ie contract not terminated) will continue to have WTC entitlement, this will be treated as a temporary change. This will apply to those who have their hours reduced even to nil (employed or self-employed). They advised that the claimant does not need to inform them.

If the job is terminated or the claimant ceases to trade as a self-employed person then the usual four-week run-on will apply.

Apparently the memo, that was issued last night, also says that the claimant should ring in 8 weeks’ time to update HMRC on their situation.

Stuart
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Update from HMRC today confirms that working hours rules have been relaxed to enable tax credits claims to continue -

‘Those working reduced hours due to coronavirus or those being furloughed by their employer will not have their tax credits payments affected if they are still employed or self-employed.

These customers do not need to contact HMRC about this change. We will treat customers as working their normal hours until the Job Retention Scheme and Self-Employment Income Support Scheme close, even if they are not using either scheme.

We’ll use the information we hold about the number of hours they normally work.

Customers can still report any other changes in income, childcare and hours in the normal way. However, they must tell us if they or their partner lose their job, are made redundant or cease trading.’

Vonny
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Welfare rights adviser - Social Inclusion Unit, Swansea

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Has there been any legislation to support the announcement using usual hours even though not working due to corona?