7 June 2012
Couples with Children must contact HMRC – to get their working tax credits reinstated
From 6 April 2012, HMRC stopped working tax credit (WTC) for most couples with children who did not work at least 24 hours a week between them (with one person working at least 16 hours). This included some who were still entitled to WTC from 6 April because they are covered by one of the exceptions to this new rule. HMRC failed to tell these claimants that they needed to contact them by 6 April if one of the exceptions applied to them.
Our blog post on 28 March 12 advised claimants to contact HMRC as soon as possible if one of the exceptions applied to them. It also linked to an article by the Low Incomes Tax Reform Group who urged HMRC to take corrective action by writing to those affected before 6 April.
HMRC have today confirmed that a letter has been sent to all Claimants who may have had their WTC stopped in April 2012. The letter asks claimants to contact HMRC straight away if they have increased their working hours, or if one of the exceptions applies to them.
What are the new rules from 6 April 2012?
Under the old rules, a couple with children qualified for WTC if one person worked at least 16 hours a week. From 6 April 2012, couples with children are required to work at least 24 hours between them, with one person working at least 16 hours a week in order to qualify for WTC.
What are the exceptions to this new rule?
There are a number of exceptions to this new requirement which mean that people can continue to qualify for WTC by working at least 16 hours a week (instead of 24 hours) from April 2012. Those who qualify for WTC in another way (because they are aged 60 or over or qualify for the disability element of WTC) will qualify by working at least 16 hours and should not have had their WTC stopped on 6 April.
There are four other situations where the new 24 hour rule does not apply. One person only needs to work at least 16 hours if the other person is:
- incapacitated (meaning they are in receipt of certain benefits due to ill health),
- an inpatient in hospital,
- in prison, or
- entitled to carer’s allowance.
The last exception was announced only recently after a coalition of charities, led by LITRG, wrote to the Minister asking for an extension of the exceptions to cover carers (see their article).
If any of the exceptions above apply, claimants must contact HMRC in order to get their WTC reinstated from 6 April 2012.
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