17 March 2020
Tax credits – underpayments of child disability element
The Office for Budget Responsibility has published its Economic and fiscal outlook – March 2020. These reports often provide extra detail around some of the Government’s policy measures.
The OBR report explains that HMRC has identified 24,000 families who receive tax credits and have been underpaid child disability elements in their awards.
At paragraph A11, the report says:
Correcting the underpayment of child tax credit for families with disabled children: for the third time in four years the Government has identified families of disabled children that have been underpaid the amount of child tax credit (CTC) due to them. A higher level of CTC is available for disabled children in receipt of either disability living allowance or personal independence payment. HMRC relies on a data feed from DWP to identify those eligible. At Autumn Statement 2016 the Government announced it would make payments to 28,000 families that were underpaid between 2011 and 2014. By 2017 a further 17,000 affected families had been identified, and they too have now been paid. HMRC and DWP have now discovered another 24,000 families and the Government plans to pay them towards the end of 2019-20 and in 2020-21.
Given the way HMRC have managed this type of error in previous years, we believe claimants do not need to take any action themselves and HMRC will contact them in due course if they are affected.
We have asked HMRC for further detail about this latest exercise and will provide more information as it becomes available. In the meantime, please direct any queries on this point to HMRC.