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2 children limit
A colleague has asked me to pose the following question.
It’s fairly minor, but it is in relation to the changes to Tax credits/UC from 2017 for children:-
The announcement in the summer budget talks about limiting Tax Credits to 2 children, so that children born after this date wont be taken into consideration in any new UC claim, nor will they be paid extra through the TC system (which is fairly straight forward).
It goes on to say that the existing entitlement of families who remain on TC and UC (who have more than 2 children prior to April 2017 ) will be unaffected by the reforms, however then, it also states that all new claims for UC made after April 2017 will limit the claim to support for children to 2 children irrespective when born (so? will this include those who are migrated from other benefits like ESA/JSA claimants after April 2017? As they will have to make a new UC claim? When you claim UC the TC element is replaced by UC, will it then be treated as a new claim or will there be protection?)
The information in the budget is a bit ambiguous and just wondered if anyone else knew any more?
I had been wondering the same thing. My worry being that the DWP will almost inevitably seek to disentitle as many children as possible so that their masters can crow about public money saved etc etc ad infintum. Bodes ill for some of our clients who have 9 or 10 children.
In the impact assessment it says you will not be considered to be making a new claim for UC and will be exempt if moving from tax credits to UC or claiming within 6 mnths of TC or UC claim
We’ve been following this up with DWP, who have told us the following:
It applies to new claims in UC. Claims for UC as a result of migration from Tax Credits to UC will not be counted as a new claim for these purposes neither will claims within six months of a previous Universal Credit or Child Tax Credit claim which included entitlement for more than two children. In these cases people, will continue to be able to receive Child Element for the same children they remain responsible for. However, if families have another child after April 2017 they will not receive further Child Tax Credit or Child Element of Universal Credit for that child if they are already receiving such support for two or more children
I’ve sought further clarification to confirm that with respect to the new UC claims from April 2017, it is the case that the two child limit applies irrespective of the birth dates of the children, just to be absolutely clear about the intention and will let you know what they say in due course.
And we’ve now had it clarified that:
My question - Any new claim for UC post April 2017 will have the two-child restriction applied, regardless of when the respective children were born e.g. if all 4 children are born before April 2017, they will be subject to the two-child restriction for any new UC claim post-April 2017? Is this correct?
The response - Yes, this is correct. Of course some claims will not be counted as new if they are migrating from Child Tax Credits or there has been a period of less than 6 months between claims.
Hope this helps clarify.
Thank you very much Paul.
Looking at Paul’s DWP clarification and the HMRC consultation content there may be some important tactical advice issues which still need further clarification.
If, as I suspect, there may be some circumstances where there will still be new claims for CTC post April 2017 then is it the case that:
If there are more than 2 children, they will qualify for CTC if born before that date?
For UC they won’t?
The HMRC consultation is phrased confusingly as well, when it says:
“The child element that goes to make up CTC will be limited to two children for each family from 6 April 2017. This will apply where a family has a third or subsequent child born on or after this date.”
That can be read in two ways; for example a family with 4 children born pre 2017, could, having a post 2017 child be either:
a) Receive benefit limited to 4, as before the new child, as the 5th child is ignored
b) Receive benefit limited to 2, where they were getting 4 before the new child, as the 5th triggers “limited to two … where a family has a third or subsequent child born on or after this date.”
Isn’t it clear for child tax credit, that this restriction only applies to children born after 6 April 2017 whatever happens otherwise? Or am I missing the point (always a possibility).
That’s what I thought but the way they’re describing it….
I suspect the ambiguity is deliberate.
...
a) Receive benefit limited to 4, as before the new child, as the 5th child is ignored
b) Receive benefit limited to 2, where they were getting 4 before the new child, as the 5th triggers “limited to two … where a family has a third or subsequent child born on or after this date.”
I’d just assumed they meant (a) but as far as I can see, the proposed new subsections 9(3A) and 9(3B) Tax Credits Act 2002 - actually point to (b) - presumably this means they’re going to cover this situation in the regulations?
“(3A) Subsection (3B) applies in the case of a person or persons entitled to
child tax credit where the person is, or either or both of them is or are,
responsible for a child or qualifying young person born on or after 6
5 April 2017.
(3B) The prescribed manner of determination in relation to the person or
persons must not include an individual element of child tax credit in
respect of the child or qualifying young person unless—
(a) he is (or they are) claiming the individual element of child tax
credit for no more than one other child or qualifying young person, or
(b) a prescribed exception applies.”