The Tax Credits, Childcare Payments and Childcare (Extended Entitlement) (Coronavirus and Miscellaneous Amendments) Regulations 2020

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend a number of statutory instruments in relation to tax credits (social security benefits), childcare payments and the Department for Education’s early years extended entitlement scheme (all of which are administered by the Commissioners for Revenue and Customs). The amendments are necessary as a consequence of coronavirus and the Coronavirus Job Retention Scheme (established under a direction given by the Chancellor of the Exchequer under sections 71 and 76 of the Coronavirus Act 2020 (c. 7)). These Regulations also make amendments to the Tax Credits (Definition and Calculation of Income) Regulations 2002 (S.I. 2002/2006) to disregard certain payments from being taken into as account as income.

Regulation 1 provides for citation, commencement and effect.

Regulation 2 amends the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 (S.I. 2002/2005) (“the Entitlement Regulations”). Paragraph (2) provides for any period of time during which a person is unable to work, whether due to having to self-isolate or as a consequence of a lockdown, to be disregarded when calculating the hours a person normally works for the purposes of working tax credit.

Regulations 5 and 6 of the Entitlement Regulations treat a person as being engaged in qualifying remunerative work where that person is absent from work in connection with childbirth, adoption or bereavement in relation to a child (regulation 5) or due to being unwell (regulation 6) providing that immediately before the period in question that person had been in qualifying remunerative work. Paragraphs (3) and (4) of regulation 2 ensure that this treatment is extended to persons who are treated as working by virtue of regulation 7E of the Entitlement Regulations.

Paragraph (5) amends regulation 7E of the Entitlement Regulations which provides for situations in which a person is treated as being engaged in qualifying remunerative work even where that person has been furloughed under the Coronavirus Job Retention Scheme or is a coronavirus-impacted worker (as defined in regulation 7E(3)). Paragraph 5(a) extends the categories of persons who are treated as coronavirus-impacted workers. Paragraph 5(c) amends paragraph (4) of regulation 7E of the Entitlement Regulations which sets out the period for which a person will be treated as being in remunerative work once that person ceases to be a furloughed employee as a consequence of the closure of the Coronavirus Job Retention Scheme. Paragraph 5(d) inserts a new paragraph (4A) into regulation 7E which makes similar provision for cases where a person ceases to be furloughed employee under that Scheme for any other reason. Paragraph 5(e) substitutes paragraph (5) of regulation 7E of the Entitlement Regulations to specify the circumstances in which a person ceases to be a furloughed employee. Paragraph 5(f), 5(g) and 5(h) make similar amendments in relation to persons who cease to be coronavirus-impacted workers.

Regulation 3 amends the Tax Credits (Definition and Calculation of Income Regulations) 2002 (S.I. 2002/2006) (“the Income Regulations”). Paragraph (2) amends the definition of “coronavirus support scheme” to include a reference to the tax year 2021-22. Paragraph (3) amends Table 6 in regulation 19 which sets out the payments that are to be disregarded in calculating a person’s income for the purposes of tax credits. Paragraph 3(a) amends the wording of entry 37 to include the Test and Trace Support Payment scheme which provides financial support to a person who is required to self-isolate due to coronavirus. Paragraph 3(b) and 3(c) insert entries in respect of payments made by the Scottish Ministers for the purpose of assisting with the costs of buying healthy foods for children and supporting women affected by complications after mesh implant surgery. Paragraph 3(d) inserts an entry in respect of payments made under the scheme known as the Covid Winter Grant Scheme or similar schemes established by the Devolved Administrations.

Regulation 4 amends the Childcare Payments (Eligibility) Regulations 2015 (S.I. 2015/448) (“the Eligibility Regulations”). Paragraph (2) inserts definitions of “coronavirus” and “coronavirus support scheme” into regulation 2 of the Eligibility Regulations and as a consequence paragraph (4) omits the definition of “coronavirus” from regulation 15 of the Eligibility Regulations. The definition of “coronavirus support scheme” includes any coronavirus related job support scheme established under a direction made under section 76 of the Coronavirus Act 2020 (c. 7) and is identical to that in the Income Regulations. Paragraph (3) amends regulation 9 of the Eligibility Regulations so that a person who fulfils the new conditions is in qualifying paid work. The conditions are that a person’s income has fallen below the relevant threshold (defined in paragraph (6) of regulation 9 of the Eligibility Regulations) due to coronavirus and that person is either receiving payments, or has applied for and is reasonably expecting a payment, is intending to make a claim which that person reasonably expects to be accepted, or whose employer has made such a claim under the Coronavirus Job Retention Scheme (established under section 76 of the Coronavirus Act 2020) to cover that person’s normal income.

Regulation 5 amends the Childcare (Early Years Provision Free of Charge) (Extended Entitlement) Regulations 2016 (S.I. 2016/1257) (“the Childcare Regulations”). Paragraph (2) inserts a definition of “coronavirus support scheme” into regulation 2 of the Childcare Regulations. The term “coronavirus support scheme” will include any coronavirus related job support scheme established under a direction made under section 76 of the Coronavirus Act 2020 and is identical to the definition in the Eligibility Regulations and the Income Regulations. Paragraph (3) amends regulation 5 of the Childcare Regulations so that a person who fulfils the conditions is in paid work. The conditions are that a person’s income has fallen below the relevant threshold (defined in paragraph (6) of regulation 5 of the Eligibility Regulations) due to coronavirus and that person is either receiving payments, or has applied for and is reasonably expecting a payment, is intending to make a claim which that person reasonably expects to be accepted, or whose employer has made such a claim under the Coronavirus Job Retention Scheme (established under section 76 of the Coronavirus Act 2020) to cover that person’s normal income.

A full impact assessment has not been produced for these Regulations as no impact on the private or voluntary sectors is foreseen.