WTC - still employed but not being paid

Hi SallyA

She should certainly get the 4 week run-on of WTC, by which time we are expecting more clarity from HMRC about whether claimants can be treated as in work in this situation. It may be worth checking whether her employer can access the Coronavirus Job Retention Scheme, or a c-ESA claim may be worthwhile as can be treated as in work for up to 28 weeks if in work immediately before and meets definition of “isolation” - see https://askcpag.org.uk/content/200997/benefit-and-coronavirus—early-changes

Mark

I have seen a screen grab on another website where claimant has logged in to their Tax Credits account and seen message saying that if hours are reduced as a result of coronavirus these do not need to be reported and claimants hours will be treated as unchanged.

However whether this applies to the secondary impact of coronavirus is unclear.

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Ianb - 25 March 2020 06:33 PM

However whether this applies to the secondary impact of coronavirus is unclear.

Thanks - that’s interesting! I fear it won’t apply - ACAS (and other sources) on school closures just refer to right to time off to care for dependants and as the employer is not reducing her hours, I can’t see she’d be covered….

Hi Ianb, that is very interesting and I think may help in SallyA’s case .
WTC Regs refer to hours “normally performed” (Reg 4(3)) and the four week run-on kicks in under reg 7D if someone “ceases to work” or “starts to work less than (required) hours”. So hopefully they consider people have not ceased work in this situation, and are treating hours normally performed as unchanged. There is no strict rule on how long a temporary change can apply in tax credits.

Mark

Hi,

I just phoned the Tax Credits intermediaries line and they confirmed that there is an 8 week disregard of a drop in working hours due to Coronavirus.
So people can report a drop in earnings but still be treated as in full-time work. They say they will review after 8 weeks if Corona restrictions still in place.
I asked for a written source of this info and they just pointed me to Gov.uk but didn’t name a specific page.

Only just reading the above message about childcare and i didn’t get the chance to ask this so sorry.

L

I’ve looked in vain for anything on gov.uk about this (there are a few other things which DWP/HMRC are currently saying are on gov.uk but are just not there!)

However, the message to clients seems to be pretty consistent - ie along the lines of what Liam reports - it would just be good to see guidance..

See also https://www.litrg.org.uk/tax-guides/coronavirus-guidance/coronavirus-employees-work-changes

hat/tip Mark Willis

Great stuff WillH, many thanks!

Liam C - 01 April 2020 11:30 AM

Hi,

I just phoned the Tax Credits intermediaries line and they confirmed that there is an 8 week disregard of a drop in working hours due to Coronavirus.
So people can report a drop in earnings but still be treated as in full-time work. They say they will review after 8 weeks if Corona restrictions still in place.
I asked for a written source of this info and they just pointed me to Gov.uk but didn’t name a specific page.

Only just reading the above message about childcare and i didn’t get the chance to ask this so sorry.

L

Hi
I just phoned the intermediaries line for an update - no further guidance yet.

My client’s an agency worker whose 16h/week stopped week commencing 23/03 as the schools closed and she’s a TA in schools. Employer hasn’t furloughed her. 
TCO line said they may get advice in the next two weeks as to WTC run-on; for most people the start of the 8 weeks was 23/03, meaning that it’s only 6 weeks this Friday (but tricky if your hours of work dipped before then so your 8-week run-on may now be ended).

Agree that I can’t find reference to 8 weeks anywhere on gov.uk, someone on a different thread poitned out it was mentioned in a footnote to an HB circular.
(item no. 7, here: https://www.gov.uk/government/publications/housing-benefit-adjudication-circulars-2020/a72020-the-social-security-coronavirusfurther-measures-regulations-2020)

Confirmation from HMRC that no change to normal working hours for WTC:
https://www.gov.uk/government/news/tax-credits-customers-will-continue-to-receive-payments-even-if-working-fewer-hours-due-to-covid-19?utm_source=dd8ce048-7219-4179-95bd-20cf3ae5dbce&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Thanks Mark for being on it.
My client’s in a pickle - she can keep her WTC then, but having lost the £130 or so wages per week from work she’s really struggling. Agency worker and employer won’t furlough her. If she goes onto UC to try and get more income she’ll be capped though, as hasn’t worked long enough for the grace period to avoid the benefit cap.

Also I’m a bit unclear how this announcement affects agency workers - she hasn’t ‘lost her job’ per se, only had a reduction in hours (to zero) - am assuming she counts as ‘still employed’

“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… 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.”

Also - point made above - but no parity for UC claimaints - whose earnings may have dropped exposing them to the benefit cap :-(