6 December 2012
The Chancellor’s Autumn Statement, 5 December 2012
As part of his package of measures for the economy, the Chancellor of the Exchequer announced some changes to the uprating of certain benefits and payments, notably that apart from payments linked to disability, rates will generally rise by just 1% instead of the usual Consumer Price Index (CPI)-linked uprating .
The headline announcements are:
Child Benefit rates were already frozen for 2013-14 and will increase by 1% in 2014-15 and 2015-16.
Tax Credits disability elements will increase in line with the CPI (2.2%) but all other elements are either frozen or increased by only 1% in 2013-14.
Guardian’s allowance is increased in line with the CPI for 2013-14.
All of the new rates published by HM Treasury can be found here
The Chancellor also announced some other initiatives aimed at recovering tax credit debt and reducing the levels of error & fraud.
- The Government are going to trial use of Debt Collection Agencies to collect tax credit debt. We don’t have details of this initiative and will encourage HMRC to ensure adequate customer safeguards are in place as we understand the private companies will be incentivised on a payment by results basis.
- HMRC and DWP will pilot improvements to collecting debts where a customer has debts with both Departments.
- Tax credit customers who have high childcare costs will be asked to provide evidence of their costs to HMRC
- Parents of children over 16 will have to provide annual confirmation that their child remains in Full-Time non-Advanced Education or Advanced Training to qualify for the continuation of Child Tax Credit until the child reaches age 19.
Details of the Chancellor’s Autumn Statement can be found here