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Statutory Instruments

2002 No. 2005

TAX CREDITS

The Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002

Made

30th July 2002

Coming into force in accordance with regulation 1

M1 Whereas a draft of this instrument, which prescribes the amount in excess of which, by virtue of subsection (2) of section 12 of the Tax Credits Act 2002, charges are not to be taken into account for the purposes of that subsection, and which also contains the first regulations made under sections 11 and 12 of that Act, has been laid before, and approved by resolution of, each House of Parliament:

Now, therefore, the Treasury, in exercise of the powers conferred upon them by sections 10, 11, 12, 65(1) and (7) and 67 of the Tax Credits Act 2002M2, hereby make the following Regulations:

Modifications etc. (not altering text)

C1Regulations modified (6.4.2003) by The Tax Credits (Polygamous Marriages) Regulations 2003 (S.I. 2003/742), regs. 26 –34 (with reg. 1(2)) (as amended (6.4.2012) by The Tax Credits (Miscellaneous Amendments) Regulations 2012 (S.I. 2012/848), reg. 9)

Marginal Citations

M12002 c.21. The first regulations made under sections 11 and 12 are subject to approval by resolution of each House of Parliament by virtue of section 66(2)(b) and (c) of the Act.

M2Section 67 is cited because of the meaning it ascribes to “prescribed”.

PART 1U.K. GENERAL

Citation, commencement and effectU.K.

1.  These Regulations may be cited as the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 and shall come into force—

(a)for the purpose of enabling claims to be made, on 1st August 2002;

(b)for the purpose of enabling decisions on claims to be made, on 1st January 2003; and

(c)for all other purposes, on 6th April 2003;

and shall have effect for the tax year beginning on 6th April 2003 and subsequent tax years.

InterpretationU.K.

2.—(1) In these Regulations, except where the context otherwise requires—

(2) For the purposes of these Regulations a person is responsible for a child or qualifying young person if he is treated as being responsible for that child or qualifying young person in accordance with the rules contained in regulation 3 of the Child Tax Credit Regulations 2002.

(3) A reference in these Regulations to an enactment applying to Great Britain but not to Northern Ireland shall, unless the context otherwise requires, include a reference to the corresponding enactment applying in Northern Ireland.

[F8(4) In these Regulations as they apply to an office a reference to being employed includes a reference to being the holder of an office.]

Textual Amendments

Marginal Citations

M8S.I. 1975/555; the relevant amending instruments are S.I. 1977/1693 and 1987/1683.

M111973 c.50: section 2 was substituted by section 25(1) of the Employment Act 1988 (c.19).

Other elements of working tax creditU.K.

3.—(1) For the purposes of determining the maximum rate of working tax credit, in addition to the basic element and the disability element M14, the following elements are prescribed—

(a)a 30 hour element;

(b)a second adult element;

(c)a lone parent element;

(d)a child care element;

(e)a severe disability element; and

(f)a 50 plus element.

(2) It is a condition of entitlement to the other elements of working tax credit that the person making the claim for working tax credit is entitled to the basic element.

(3) If the claim for working tax credit is a joint claim, and both members of the couple satisfy the conditions of entitlement for—

(a)the disability element,

(b)the severe disability element, or

(c)the 50 plus element,

the award must include two such elements.

Marginal Citations

M14Subsections (2) and (3) of section 11 of the Act provide that working tax credit shall include the basic element and the disability element, whilst subsection (5) provides for the possibility of including other elements.

PART 2U.K. CONDITIONS OF ENTITLEMENT

Basic elementU.K.

Entitlement to basic element of Working Tax Credit: qualifying remunerative workU.K.

4.—(1) Subject to the qualification in paragraph (2), a person shall be treated as engaged in qualifying remunerative work if, and only if, he satisfies all of the following conditions.

(2) A person who would otherwise satisfy the conditions in paragraph (1) shall not be regarded as engaged in qualifying remunerative work to the extent that he is—

(a)engaged by a charitable or voluntary organisation, or is a volunteer, if the only payment received by him or due to be paid to him is a payment by way of expenses which falls to be disregarded under item 1 in Table 7 in regulation 19 of the Tax Credits (Definition and Calculation of Income) Regulations 2002;

(b)engaged in caring for a person who is not a member of his household but is temporarily residing with him if the only payment made to him for providing that care is disregarded income by virtue of item 3 or 4 in Table 8 in regulation 19 of the Tax Credits (Definition and Calculation of Income) Regulations 2002;

(c)engaged on a scheme for which a training allowance is being paid;

(d)participating in the Intensive Activity Period specified in regulation 75(1)(a)(iv) of the Jobseeker’s Allowance Regulations 1996M15or the Preparation for Employment Programme specified in regulation 75(1)(a)(v) of the Jobseeker’s Allowance Regulations (Northern Ireland) 1996M16;

(e)engaged in an activity in respect of which—

(i)a sports award has been made, or is to be made, to him, and

(ii)no other payment is made, or is expected to be made, to him; or

(f)participating in an employment zone programme, that is to say a programme established for one or more areas designated pursuant to section 60 of the Welfare Reform and Pensions Act 1999M17, and subject to the Employment Zones Regulations 2000M18if he receives no payments under that programme other than—

(i)discretionary payments disregarded in the calculation of a claimant’s income under item 6(b) in [F10Table 6] in regulation 19 of the Tax Credits (Definition and Calculation of Income) Regulations 2002; or

(ii)training premiums.

(3) The number of hours for which a person undertakes qualifying remunerative work is—

(a)in the case of an apprentice, employee or office-holder the number of hours of such work which he normally performs—

(i)under the contract of service or of apprenticeship under which he is employed; or

(ii)in the office in which he is employed;

(b)in the case of an agency worker, the number of hours in respect of which remuneration is normally paid to him by an employment agency with whom he has a contract of employment; or

(c)in the case of a person who is self-employed, the number of hours he normally performs for payment or in expectation of payment.

This is subject to the following qualification.

(4) In reckoning the number of hours of qualifying remunerative work which a person normally undertakes—

(a)any period of customary or paid holiday, and

(b)any time allowed for meals or refreshment, unless the person is, or expects to be paid earnings in respect of that time,

shall be disregarded.

[F11(5) In reckoning the number of hours of qualifying remunerative work which a person normally undertakes, any time allowed for visits to a hospital, clinic or other establishment for the purpose only of treating or monitoring the person’s disability shall be included; but only if the person is, or expects to be, paid in respect of that time.]

Textual Amendments

Marginal Citations

M15S.I. 1996/207. Regulation 75 was substituted by S.I. 1997/2863 and relevant amendments were made by S.I. 2000/721 and 1978 and 2001/1029.

M16S.R. 1996 No. 198. Regulation 75 was substituted by regulation 8 of S.R. 1997 No. 541 and paragraph (1)(a)(v) inserted by regulation 5(a) of S.R. 2001 No. 151.

M18S.I. 2000/721. Relevant amendments were made by S.I. 2000/1279 and 1305 and 2001/261 and 1865.

[F12Time off in connection with maternity, paternity and adoptionU.K.

5.—(1) This regulation applies for any period during which a person—

(a)is paid maternity allowance,

(b)is paid statutory maternity pay,

(c)is absent from work during an ordinary maternity leave period under section 71 of the Employment Rights Act 1996 or Article 103 of the Employment Rights (Northern Ireland) Order 1996,

(d)is paid statutory paternity pay,

(e)is absent from work during a paternity leave period under section 80A of the Employment Rights Act 1996 or Article 112A of the Employment Rights (Northern Ireland) Order 1996,

(f)is paid statutory adoption pay, or

(g)is absent from work during an ordinary adoption leave period under section 75A of the Employment Rights Act 1996 or Article 107A of the Employment Rights (Northern Ireland) Order 1996.

(2) For the purposes of the conditions in regulation 4(1), the person is treated as being engaged in qualifying remunerative work during the period.

(3) The person must have been engaged in qualifying remunerative work immediately before the beginning of the period.

(4) A person who is self-employed is treated as engaged in qualifying remunerative work for the requisite number of hours during any period for which paragraph (1) would have applied in his case but for the fact that the work he performed in the week immediately before the period began, although done for payment or in the expectation of payment, was not performed under a contract of service or apprenticeship.]

Textual Amendments

[F13Periods of illness or incapacity for workU.K.

6.—(1) This regulation applies for any period during which a person—

(a)is paid statutory sick pay,

(b)is paid short-term incapacity benefit at the lower rate under sections 30A to 30E of the Contributions and Benefits Act,

(c)is paid income support on the grounds of incapacity for work under paragraphs 7 and 14 of Schedule 1B to the Income Support (General) Regulations 1987, or

(d)receives national insurance credits on the grounds of incapacity for work under regulation 8B of the Social Security (Credits) Regulations 1975.

(2) For the purposes of the conditions in regulation 4(1), the person is treated as being engaged in qualifying remunerative work during the period.

(3) The person must have been engaged in qualifying remunerative work immediately before the beginning of the period.

(4) If the person is paid income support as specified in paragraph (1)(c) or receives national insurance credits as specified in paragraph (1)(d) he is treated as being engaged in qualifying remunerative work for a period of 28 weeks only, beginning with the day on which he is first paid income support or receives national insurance credits (as the case may be).

(5) A person who is self-employed is treated as engaged in qualifying remunerative work for the requisite number of hours during any period for which paragraph (1) would have applied in his case but for the fact that the work he performed in the week immediately before the period began, although done for payment or in the expectation of payment, was not performed under a contract of service or apprenticeship.]

Textual Amendments

Term time and other seasonal workersU.K.

7.—(1) For the purposes of the conditions in regulation 4(1), paragraph (2) applies if a person—

(a)works at a school, other educational establishment or other place of employment,

(b)there is a recognisable cycle to his employment there; and

(c)the length of that recognisable cycle is one year and includes periods of school holidays or similar vacations during which he does not work.

(2) If this paragraph applies, the periods mentioned in paragraph (1)(c) are disregarded in determining whether the conditions in regulation 4(1) are satisfied.

[F14Strike periodsU.K.

7A.—(1) This regulation applies for any period during which a person is on strike.

(2) For the purposes of the conditions in regulation 4(1), the person is treated as being engaged in qualifying remunerative work during the period.

(3) The person—

(a)must have been engaged in qualifying remunerative work immediately before the beginning of the period, and

(b)must not be on strike for longer than a period of ten consecutive days on which he should have been working.]

Textual Amendments

[F14Persons suspended from workU.K.

7B.—(1) This regulation applies for any period during which a person is suspended from work while complaints or allegations against him are investigated.

(2) For the purposes of the conditions in regulation 4(1), the person is treated as being engaged in qualifying remunerative work during the period.

(3) The person must have been engaged in qualifying remunerative work immediately before the beginning of the period.]

Textual Amendments

[F14Pay in lieu of noticeU.K.

7C.—(1) This regulation applies if a person stops work and receives pay in lieu of notice.

(2) For the purposes of the conditions in regulation 4(1), the person shall not be treated as being engaged in qualifying remunerative work during the period for which he receives the pay.]

Textual Amendments

Gaps between jobsU.K.

8.  For the purposes of the conditions in regulation 4(1) a person shall be treated as being engaged in qualifying remunerative work for the requisite number of hours if he has been so engaged within the past 7 days.

Disability elementU.K.

Disability element and workers who are to be treated as at a disadvantage in getting a jobU.K.

[F159.—(1) The determination of the maximum rate must include the disability element if the claimant, or, in the case of a joint claim, one of the claimants—

(a)undertakes qualifying remunerative work for at least 16 hours per week;

(b)has any of the disabilities listed in Part 1 of Schedule 1, or in the case of an initial claim, satisfies the conditions in Part 2 of Schedule 1; and

(c)is a person who satisfies any of Cases A to G on a day for which the maximum rate is determined in accordance with these Regulations.

(2) Case A is where the person has been in receipt of the higher rate of short-term incapacity benefit, long-term incapacity benefit or severe disablement allowance for at least one day in the preceding 182 days.

(3) Case B is where, for at least one day in the preceding 182 days, the person has been a person for whom the applicable amount included a higher pensioner or disability premium determined—

(a)in the case of income support, in accordance with paragraphs 10(1)(b) or (2)(b) or 11, and 12, of Part III of Schedule 2 to the Income Support (General) Regulations 1987;

(b)in the case of income-based jobseeker’s allowance, in accordance with paragraph 12(1)(a), (b)(ii) or (c) or 13, and 14 of Schedule 1 to the Jobseeker’s Allowance Regulations 1996;

(c)in the case of housing benefit, in accordance with paragraphs 10(1)(b) or (2)(b) or 11, and 12 of Part III of Schedule 2 to the Housing Benefit (General) Regulations 1987;

(d)in the case of council tax benefit, in accordance with paragraphs 11(1)(b) or (2)(b) or 12, and 13 of Part III of Schedule 1 to the Council Tax Benefit (General) Regulations 1992.

For the purposes of this Case “the applicable amount” has the meaning given by section 135 of the Contributions and Benefits Act.

(4) Case C is where the person is a person to whom at least one of the following is payable—

(a)a disability living allowance;

(b)an attendance allowance;

(c)a mobility supplement or a constant attendance allowance which is paid, in either case, in conjunction with a war pension or industrial injuries disablement benefit.

(5) Case D is where the person has an invalid carriage or other vehicle provided under—

(a)section 5(2)(a) of, and Schedule 2 to, the National Health Service Act 1977,

(b)section 46 of the National Health Service (Scotland) Act 1978, or

(c)Article 30(1) of the Health and Personal Social Services (Northern Ireland) Order 1972.

(6) Case E is where the person—

(a)has received, on account of his incapacity for work, statutory sick pay, occupational sick pay, short-term incapacity benefit payable at the lower rate or income support, for a period of 140 qualifying days, or has been credited with Class 1 or Class 2 contributions under the Contributions and Benefits Act for a period of 20 weeks on account of incapacity for work, and where the last of those days or weeks (as the case may be) fell within the preceding 56 days;

(b)has a disability which is likely to last for at least six months, or for the rest of his life if his death is expected within that time; and

(c)has gross earnings which are less than they were before the disability began by at least the greater of 20 per cent. and £15 per week.

For the purpose of this Case “qualifying days” are days which form part of a single period of incapacity for work within the meaning of Part 11 of the Contributions and Benefits Act.

(7) Case F is where the person—

(a)has undertaken training for work for at least one day in the preceding 56 days; and

(b)has received the higher rate of short-term incapacity benefit, long-term incapacity benefit or severe disablement allowance within 56 days before the first day of that period of training for work.

(8) Case G is where the person was entitled, on the preceding day, to the disability element of working tax credit or to disabled person’s tax credit by virtue of his having satisfied the requirements of Case A, B, E or F at some earlier time.

(9) For the purposes of the Act, a person who satisfies paragraph (1)(b) is to be treated as having a physical or mental disability which puts him at a disadvantage in getting a job.]

Textual Amendments

[F15Initial claimsU.K.

9A.—(1) In regulation 9(1)(b) an “initial claim” means a claim which—

(a)is made for the disability element of working tax credit, and

(b)relates to a person who has not had an entitlement to that element or to disabled person’s tax credit during the two years immediately preceding the making of the claim.

(2) In paragraph (1) any reference to the making of a claim includes the giving of notification, in accordance with regulation 20 of the Tax Credits (Claims and Notifications) Regulations 2002, of a change of circumstances falling within that regulation.

(3) For the purposes of paragraph (1)(b) a person is treated as having an entitlement to the disability element of working tax credit if, by virtue of the person being a person who satisfies regulation 9, that element is taken into account in determining the rate at which the person is entitled to a tax credit.]

Textual Amendments

[F15Training for work etc.U.K.

9B.—(1) In these Regulations “training for work” means training for work received—

(a)in pursuance of arrangements made under—

(i)section 2(1) of the Employment and Training Act 1973,

(ii)section 2(3) of the Enterprise and New Towns (Scotland) Act 1990, or

(iii)section 1(1) of the Employment and Training Act 1950, or

(b)on a course whose primary purpose is the teaching of occupational or vocational skills, and which the person attends for 16 hours or more a week.

(2) For the purposes of regulation 9(7) a period of training for work means a series of consecutive days of training for work, there being disregarded any day specified in paragraph (3).

(3) Those days are any day on which the claimant was—

(a)on holiday;

(b)attending court as a justice of the peace, a party to any proceedings, a witness or a juror;

(c)suffering from some disease or bodily or mental disablement as a result of which he was unable to attend training for work, or his attendance would have put at risk the health of other persons;

(d)unable to participate in training for work because—

(i)he was looking after a child because the person who usually looked after that child was unable to do so;

(ii)he was looking after a member of his family who was ill;

(iii)he was required to deal with some domestic emergency; or

(iv)he was arranging or attending the funeral of his partner or a relative; or

(e)authorised by the training provider to be absent from training for work.

(4) For the purposes of paragraph (3)(d)(iv) “relative” means close relative, grandparent, grandchild, uncle, aunt, nephew or niece; and in this paragraph “close relative” means parent, parent-in-law, son, son-in-law, daughter, daughter-in-law, step-parent, step-son, step-daughter, brother, sister, or the spouse of any of the preceding persons or, if that person is one of an unmarried couple, the other member of that couple.]

Textual Amendments

30 hour elementU.K.

30 hour elementU.K.

10.—(1) The determination of the maximum rate must include a 30 hour element if the claimant, or in the case of a joint claim, at least one of the claimants, is engaged in qualifying remunerative work for at least 30 hours per week.

(2) The determination of the maximum rate must also include the 30 hour element if—

(a)the claim is a joint claim,

(b)at least one of the claimants is responsible for one or more children or qualifying young people,

(c)the aggregate number of hours for which the couple engage in qualifying remunerative work is at least 30 hours per week, and

(d)at least one member of the couple engages in qualifying remunerative work for at least 16 hours per week.

[F16(3) For the purposes of determining whether the condition in paragraph (2)(c) is met, the words “for not less than 16 hours per week” in paragraph (a) of the second condition in regulation 4(1) are omitted.]

Textual Amendments

Second adult elementU.K.

Second adult elementU.K.

[F1711.—(1) The determination of the maximum rate must include the second adult element if the claim is a joint claim.

(2) The determination of the maximum rate shall not include the second adult element if—

(a)one of the claimants is aged 50 or over,

(b)the 50 plus element is payable, and

(c)neither of the claimants is engaged in qualifying remunerative work for at least 30 hours per week.

(3) But subsection (2) does not apply if at least one of the claimants—

(a)is responsible for a child or a qualifying young person, or

(b)satisfies regulation 9(1).

(4) The determination of the maximum rate shall also not include the second adult element if—

(a)neither claimant has responsibility for a child or qualifying young person, and

(b)one claimant is serving a custodial sentence of more than twelve months.]

Textual Amendments

Lone parent elementU.K.

Lone parent elementU.K.

12.  The determination of the maximum rate must include the lone parent element if—

(a)the claim is a single claim; and

(b)the claimant is responsible for [F18a child or qualifying young person].

Textual Amendments

Child care elementU.K.

Entitlement to child care element of working tax creditU.K.

13.—(1) The determination of the maximum rate must include a child care element where that person, or in the case of a joint claim at least one of those persons, is incurring relevant child care charges and—

(a)is a person, not being a member of a married or unmarried couple, engaged in [F19qualifying remunerative work];

[F20(b)is a member or are members of a married or unmarried couple where both are engaged in qualifying remunerative work; or

(c)is a member or are members of a married or unmarried couple where one is engaged in qualifying remunerative work and the other—

(i)is incapacitated;

(ii)is an in-patient in hospital; or

(iii)is in prison (whether serving a custodial sentence or remanded in custody awaiting trial or sentence).]

(2) For the purposes of paragraph (1) a person is not treated as incurring relevant child care charges where the average weekly charge calculated in accordance with regulation 15 is nil or where an agreement within regulation 15(4) has not yet commenced.

[F21(3) A person is not engaged in qualifying remunerative work for the purposes of paragraph (1) if the person is treated as being in such work by virtue only of regulation 5, unless, immediately prior to the birth of the child, the person was responsible for another child]

[F21(4) For the purposes of paragraph (1)(c)(I) the other member of a couple is incapacitated in any of the circumstances specified in paragraphs (5) to (8).]

(5) The circumstances specified in this paragraph are where either council tax benefit or housing benefit is payable under Part 7 of the Contributions and Benefits Act to the other member or his partner and the applicable amount of the person entitled to the benefit includes—

(a)a disability premium; or

(b)a higher pensioner premium by virtue of the satisfaction of—

(i)in the case of council tax benefit, paragraph 11(2)(b) of Schedule 1 to the Council Tax Benefit (General) Regulations 1992 M19;

(ii)in the case of housing benefit, paragraph 10(2)(b) of Schedule 2 to the Housing Benefit (General) Regulations 1987 M20,

on account of the other member’s incapacity or either regulation 13A(1)(c) of Council Tax Benefit (General) Regulations 1992 (treatment of child care charges) M21 or, as the case may be, regulation 21A(1)(c) of the Housing Benefit (General) Regulations 1987 (treatment of child care charges) M22 applies in that person’s case;

(6) The circumstances specified in this paragraph are where there is payable in respect of him one or more of the following pensions or allowances—

(a)short-term incapacity benefit [F22payable at the higher rate] under section 30A of the Contributions and Benefits Act M23;

(b)long term incapacity benefit under section 40 or 41 of the Contributions and Benefits Act M24;

(c)attendance allowance under section 64 of that Act;

(d)severe disablement allowance under section 68 of that Act;

(e)disability living allowance under section 71 of that Act;

(f)increase of disablement pension under section 104 of that Act;

(g)a pension increase under a war pension scheme or an industrial injuries scheme which is analogous to an allowance or increase of disablement pension under sub-paragraph (b), (d) or (e) above.

(7) The circumstances specified in this paragraph are where a pension or allowance to which sub-paragraph [F23(c)], (d), (e) or (f) of paragraph (6) refers, was payable on account of his incapacity but has ceased to be payable only in consequence of his becoming a patient.

(8) The circumstances specified in this paragraph are where he has an invalid carriage or other vehicle provided to him under section 5(2)(a) of and Schedule 2 to the National Health Service Act 1977 M25, section 46 of the National Health Service (Scotland) Act 1978 M26; or Article 30(1) of the Health and Personal Social Services (Northern Ireland) Order 1972 M27.

Textual Amendments

Marginal Citations

M21Regulation 46A was inserted by regulation 2 of S.I. 1994/1924.

M22Regulation 21A was inserted by regulation 5 of S.I. 1994/1924.

M23Section 30A was inserted by section 1(1) of the Social Security (Incapacity for Work) Act 1994 (c.18) and amended by section 64 of the Welfare Reform and Pensions Act 1999 (c.30).

M24Sections 40 and 41 were substituted by paragraphs 8 and 9 respectively of Schedule 1 to the Social Security (Incapacity for Work) Act 1994. Section 41(5) was further amended by paragraph 21(4) of Schedule 4 to the Pensions Act 1995.

14.—(1) [F24Subject to paragraph (1A),] for the purposes of section 12 of the Act charges incurred for child care are charges paid by the person, or in the case of a joint claim, by either or both of the persons, for child care provided for any child for whom the person, or at least one of the persons, is responsible.

In these Regulations, such charges are called “relevant child care charges”.

[F25(1A) Child care charges do not include charges in respect of care provided by a relative of a child wholly or mainly in the child’s home.]

[F25(1B) For the purposes of this regulation—

(a)“relative” means parent, grandparent, aunt, uncle, brother or sister whether by blood, half blood, marriage or affinity;

(b)“the child’s home” means the home of the person, or in the case of a joint claim of either or both of the persons, responsible for the child.]

(2) “Child care” means care provided for a child—

(a)in England and Wales—

(i)by persons registered under Part 10A of the Children Act 1989 M28;

(ii)in schools or establishments which are exempted from registration under Part 10A of the Children Act 1989 by virtue of paragraph 1 or 2 of Schedule 9A M29 to that Act;

(iii)in respect of any period between his eighth birthday and the day preceding the first Tuesday in September following his twelfth birthday, where the care is provided out of school hours, by a school on school premises or by a local authority; or

(iv)by a child care provider approved by an accredited organisation within the meaning given by regulation 4 of the Tax Credit (New Category of Child Care Provider) Regulations 1999 M30;

(b)in Scotland—

(i)by a person in circumstances where the care service provided by him consists of child minding or of day care of children within the meaning of section 2 of the Regulation of Care (Scotland) Act 2001 M31 and is registered under Part 1 of that Act; or

(ii)by a local authority in circumstances where the care service provided by the local authority consists of child minding or of day care of children within the meaning of section 2 of the Regulation of Care (Scotland) Act 2001 and is registered under Part 2 of that Act;

(c)in Northern Ireland—

(i)by persons registered under Part XI of the Children (Northern Ireland) Order 1995 M32; or

(ii)by institutions and establishments exempt from registration under that Part by virtue of Article 121 of that Order; or

(d)[F26anywhere outside the United Kingdom]—

(i)by a child care provider approved by an accredited organisation within the meaning given by regulation 4 of the Tax Credit (New Category of Child Care Provider) Regulations 2002 M33; or

F27(ii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F28(e)in England—

(i)wholly or mainly in the child’s home by a child care provider approved in accordance with the Tax Credits (Approval of Home Child Care Providers) Scheme 2003; or

(ii)by a domiciliary care worker under the Domiciliary Care Agencies Regulations 2002.]

(3) For the purposes of this regulation a person is a child until the last day of the week in which falls the 1st September following that child’s fifteenth birthday (or sixteenth birthday if the child is disabled).

(4) For the purposes of paragraph (3) a child is disabled where—

(a)a disability living allowance is payable in respect of that child, or has ceased to be payable solely because he is a patient;

(b)the child is registered as blind in a register compiled by a local authority under section 29 of the National Assistance Act 1948 M34 (welfare services) or, in Scotland, has been certified as blind and in consequence is registered as blind in a register maintained by or on behalf of a local authority in Scotland, or, in Northern Ireland has been certified as blind and in consequence is registered as blind in a register maintained by or on behalf of a Health and Social Services Board; or

(c)the child ceased to be registered as blind in such a register within the 28 weeks immediately preceding the date of claim.

(5) Charges paid in respect of the child’s compulsory education or charges paid by a person to a partner or by a partner to the person in respect of any child for whom either or any of them is responsible are not relevant child care charges.

(6) Where regulation 15(4) (agreement for the provision of future child care) applies—

(a)the words “charges paid” in paragraph (1) include charges which will be incurred, and

(b)the words “child care provided” in paragraph (1) include care which will be provided.

(7) Where regulation 13(3) applies, the reference in paragraph (1) to a child for whom the person, or at least one of the persons, is responsible does not include any child born or child adopted or surrogate child acquired during a period of absence from employment in connection with childbirth or adoption within regulation 5.

(8) Relevant child care charges are calculated on a weekly basis in accordance with regulation 15.

Textual Amendments

Modifications etc. (not altering text)

C2Reg. 14 applied (for specified purposes and with effect in accordance with reg. 1 of the amending S.I., in force in so far as not already in force and with effect in accordance with reg. 1 of the amending S.I.) by The Tax Credits (Definition and Calculation of Income) Regulations 2002 (S.I. 2002/2006), regs. 1, 4(4) Table 1 Item 15

C3Reg. 14 applied (with effect in accordance with reg. 1(2) of the amending S.I.) by The Tax Credits (Claims and Notifications) Regulations 2002 (S.I. 2002/2014), regs. 1(1), 31(4)

Marginal Citations

M28Part 10A of the Children Act 1989 was inserted by section 79 of the Care Standards Act 2000 (c.14).

M29Schedule 9A to the Children Act 1989 (c.41) was inserted by Schedule 3 to the Care Standards Act 2000.

Calculation of relevant child care chargesU.K.

15.—(1) Relevant child care charges are calculated by aggregating the average weekly charge paid for child care for each child in respect of whom charges are incurred [F29and rounding up the total to the nearest whole pound].

This is subject to [F30paragraphs (1A) and (2)].

[F31(1A) In any case in which the charges in respect of child care are paid weekly, the average weekly charge for the purposes of paragraph (1) is established—

(a)where the charges are for a fixed weekly amount, by aggregating the average weekly charge paid for child care for each child in respect of whom charges are incurred in the most recent four complete weeks; or

(b)where the charges are for variable weekly amounts, by aggregating the charges for the previous 52 weeks and dividing the total by 52.]

(2) In any case in which the charges in respect of child care are paid monthly, the average weekly charge for the purposes of paragraph (1) is established—

(a)where the charges are for a fixed monthly amount, by multiplying that amount by 12 and dividing the product by 52; or

(b)where the charges are for variable monthly amounts, by aggregating the charges for the previous 12 months and dividing the total by 52.

(3) In a case where there is insufficient information for establishing the average weekly charge paid for child care in accordance with paragraphs (1) and (2), an officer of the Board shall estimate the charge—

(a)in accordance with information provided by the person or persons incurring the charges; and

(b)by any method which in the officer’s opinion is reasonable.

(4) If a person—

(a)has entered into an agreement for the provision of child care; and

(b)will incur under that agreement relevant child care charges in respect of child care during the period of the award,

the average weekly charge for child care is based upon a written estimate of the future weekly charges provided by that person.

Textual Amendments

Change of circumstancesU.K.

16.—(1) There is a relevant change in circumstances if—

F32(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)[F33during the period of an award, the weekly relevant child care charges, rounded up to the nearest whole pound]—

(i)exceed the average weekly charge calculated in accordance with regulation 15 by £10 a week or more;

(ii)are less than the average weekly charge calculated in accordance with regulation 15 by £10 a week or more; or

(iii)are nil.

If there is a relevant change in circumstances, the amount of the child care element of working tax credit shall be recalculated with effect from the specified date.

[F34(2) For the purposes of paragraph (1), the weekly relevant child care charge—

(a)where the child care charges are for a fixed weekly amount, is the aggregate of the weekly charge paid for child care for each child in respect of whom charges are incurred in each of the four consecutive weeks in which the change occurred; or

(b)where the child care charges are for variable weekly amounts, is established by aggregating the anticipated weekly charge paid for child care for each child in respect of whom charges will be incurred for the following 52 weeks and dividing the total by 52.]

(3) If in any case the charges in respect of child care are paid monthly, the weekly relevant child care charge for the purposes of paragraph (1) is established—

(a)where the charges are for a fixed monthly amount, by multiplying that amount by 12 and dividing the product by 52; or

(b)where the charges are for variable monthly amounts, by aggregating the [F35anticipated] charges for the [F36next] 12 months and dividing the total by 52.

(4) In a case where there is insufficient information for establishing the weekly relevant child care charge paid for child care in accordance with paragraphs (2) and (3), an officer of the Board shall estimate the charge—

(a)in accordance with information provided by the person or persons incurring the charges; and

(b)by any method which in the officer’s opinion is reasonable.

(5) For the purpose of paragraph (1) the specified date is—

(a)where the child care charges are increased, the later of—

(i)the first day of the week in which the change occurred, and

(ii)the first day of the week in which falls the day which is three months prior to the date notification of the change is given;

(b)where the child care charges are decreased, the first day of the week following the four consecutive weeks in which the change occurred.

Textual Amendments

Severe disability elementU.K.

Severe disability elementU.K.

17.—(1) The determination of the maximum rate must include the severe disability element if the claimant, or, in the case of a joint claim, one of the claimants satisfies paragraph (2).

(2) A person satisfies this paragraph if a disability living allowance, attributable to the care component payable at the highest rate prescribed under section 72(3) of the Contributions and Benefits Act or an attendance allowance at the higher rate prescribed under section 65(3) of that Act—

(a)is payable in respect of him; or

(b)would be so payable but for a suspension of benefit by virtue of regulations under section 113(2) of the Contributions and Benefits Act (suspension during hospitalisation), or an abatement as a consequence of hospitalisation.

50 plus elementU.K.

50 plus elementU.K.

18.—(1) The determination of the maximum rate must include the 50 plus element if—

(a)in the case of a single claim, the claimant satisfies paragraph (3), or

(b)in the case of a joint claim, at least one of the claimants satisfies that paragraph.

This is subject to the qualification in paragraph (2).

(2) The 50 plus element shall not be payable in respect of a claimant—

(a)for a continuous period of longer than 12 months; or

(b)for periods amounting in aggregate to more than 12 months if the gap between any consecutive pair of those periods is not more than 26 weeks.

(3) A claimant satisfies this paragraph if—

(a)he is aged at least 50;

(b)he started work within the preceding three months but on or after 6th April 2003; and

(c)he undertakes qualifying remunerative work for at least 16 hours per week; and

(d)he satisfies the condition in paragraph (4), (6), (7), (8) or (9).

(4) The condition is that—

(a)for a period of at least six months immediately before his starting work as mentioned in paragraph (3)(b), or

(b)for consecutive periods, amounting in the aggregate to at least six months, the last of which ends immediately before his starting work as mentioned in paragraph (3)(b),

paragraph (5) is satisfied.

(5) This paragraph is satisfied while the claimant is receiving—

(a)income support;

(b)a jobseeker’s allowance;

(c)incapacity benefit;

(d)severe disablement allowance; or

(e)both a state retirement pension and the minimum income guarantee under the Income Support (General) Regulations 1987.

(6) The condition is that for at least six months immediately prior to his starting work—

(a)another person was receiving—

(i)the payment mentioned in subparagraphs (a) to (d) of paragraph (5); or

(ii)both the payments mentioned in paragraph (5)(e); and

(b)an increase in respect of the claimant, as a dependant of the other person—

(i)in a case falling within subparagraph (a)(i) was payable with that payment; or

(ii)in a case falling within subparagraph (a)(ii) was payable with that pension.

(7) The condition is that for at least six months immediately prior to his starting work as mentioned in paragraph (3)(b) he satisfied the conditions entitling him to be credited with contributions or earnings in accordance with the Social Security (Credits) Regulations 1975 M35.

(8) The condition is that—

(a)the condition in paragraph (4)(a), (6) or (7) would have been satisfied if the reference to six months were omitted;

(b)immediately prior to the period during which that condition, as modified by subparagraph (a), is satisfied there is a period during which the condition in paragraph (9) is satisfied; and

(c)the total of the periods during which—

(i)the condition in paragraph (4)(a), (6) or (7), as modified by subparagraph (a), is satisfied; and

(ii)the condition in paragraph (9) is satisfied,

equals or exceeds six months.

(9) The condition is that the claimant, or, in the case of a joint claim, one of the claimants, is receiving—

(a)invalid care allowance;

(b)bereavement allowance; or

(c)widowed parent’s allowance.

Marginal Citations

M35S.I. 1975/556, amended by S.I. 1976/409, S.I. 1983/463, S.I. 1978/409, S.I. 1982/96, S.I. 1987/414, S.I. 1988/516, 1230, 1439 and 1545, S.I. 1989/1627, S.I. 1991/387 and 2772, S.I. 1994/1837, S.I. 1995/829, S.I. 1996/2367, S.I. 1999/2566, S.I. 2000/1483 and 3120 and S.I. 2001/518.

Death of a child or qualifying young person for whom the claimant is responsibleU.K.

Entitlement after death of a child or qualifying young person for whom the claimant is responsibleU.K.

19.—(1) Paragraph (2) applies if—

(a)the death occurs of a child or qualifying young person,

(b)working tax credit is payable to a person who was, or to a couple at least one of whom was, immediately before the death responsible for that child or qualifying young person;

(c)the prescribed conditions for an element of working tax credit were satisfied because the claimant, or at least one of the claimants, was responsible for that child or qualifying person, but would not have been satisfied but for that responsibility; and

(d)the prescribed conditions would have continued to be satisfied but for the death.

(2) If this paragraph applies, working tax credit shall continue to be payable, as if the child or qualifying young person had not died, for the period for which child tax credit continues to be payable in accordance with regulation 6 of the Child Tax Credit Regulations 2002 M36.

Marginal Citations

PART 3U.K. MAXIMUM RATE

Maximum rates of elements of working tax creditU.K.

20.—(1) The maximum annual rate of working tax credit (excluding the child care element) payable to a single claimant or to a couple making a joint claim is the sum of whichever of the following elements are applicable—

(a)the basic element specified in column (2) of the table in Schedule 2 at paragraph 1;

(b)in respect of a claimant who satisfies regulation 9(1), the disability element specified in column (2) of the table in Schedule 2 at paragraph 2;

(c)the 30 hour element specified in column (2) of the table in Schedule 2 at paragraph 3 in respect of—

(i)a single claimant who works for not less than 30 hours per week,

(ii)a couple either or both of whom work for not less than 30 hours per week; or

(iii)a couple, at least one of whom is responsible for a child or a qualifying young person and at least one of whom works for 16 hours per week if their hours of work when aggregated amount to at least 30 hours per week;

(d)the second adult element specified in column (2) of the table in Schedule 2 at paragraph 4 where regulation 11 so provides;

(e)the lone parent element specified in column (2) of the table in Schedule 2 at paragraph 5 where regulation 12 applies;

(f)the severe disability element specified in column (2) of the table in Schedule 2 at paragraph 6—

(i)in respect of a single claimant who satisfies regulation 17; or

(ii)in respect of a member of a couple making a joint claim who satisfies regulation 17; and

(g)the 50 plus element in respect of a person who satisfies regulation 18(2) at whichever of the rates specified in column 2 of the Table in Schedule 2 at paragraph 7 applies in his case.

(2) The maximum rate of the child care element of a working tax credit is 70 per cent. of the maxima specified in paragraph (3).

(3) The maxima are—

(a)£135.00 per week, where the [F37claimant or, in the case of a joint claim, at least one of the claimants, is responsible for] only one child in respect of whom relevant child care charges are paid; and

(b)£200.00 per week where the [F37claimant or, in the case of a joint claim, at least one of the claimants, is responsible for] more than one child in respect of whom relevant child care charges are paid.

Textual Amendments

Jim Fitzpatrick

John Heppell

Two of the Lords Commissioners of Her Majesty’s Treasury

Regulation 9(1)

SCHEDULE 1U.K. DISABILITY WHICH PUTS A PERSON AT A DISADVANTAGE IN GETTING A JOB

PART 1U.K.

1.  When standing he cannot keep his balance unless he continually holds onto something.U.K.

2.  Using any crutches, walking frame, walking stick, prosthesis or similar walking aid which he habitually uses, he cannot walk a continuous distance of 100 metres along level ground without stopping or without suffering severe pain.U.K.

3.  He can use neither of his hands behind his back as in the process of putting on a jacket or of tucking a shirt into trousers.U.K.

4.  He can extend neither of his arms in front of him so as to shake hands with another person without difficulty.U.K.

5.  He can put neither of his hands up to his head without difficulty so as to put on a hat.U.K.

6.  Due to lack of manual dexterity he cannot, with one hand, pick up a coin which is not more than 2½ centimetres in diameter.U.K.

7.  He is not able to use his hands or arms to pick up a full jug of 1 litre capacity and pour from it into a cup, without difficulty.U.K.

8.  He can turn neither of his hands sideways through 180 degrees.U.K.

9.  He—U.K.

(a)is registered as blind or registered as partially sighted in a register compiled by a local authority under section 24(9)(g) of the National Assistance Act 1948;

(b)has been certified as blind or as partially sighted and, in consequence, registered as blind or partially sighted in a register maintained by or on behalf of a council constituted under the Local Government (Scotland) Act 1994 M37; or

(c)has been certified as blind and in consequence is registered as blind in a register maintained by or on behalf of a Health and Social Services Board in Northern Ireland.

Marginal Citations

10.  He cannot see to read 16 point print at a distance greater than 20 centimetres, if appropriate, wearing the glasses he normally uses.U.K.

11.  He cannot hear a telephone ring when he is in the same room as the telephone, if appropriate, using a hearing aid he normally uses.U.K.

12.  In a quiet room he has difficulty in hearing what someone talking in a loud voice at a distance of 2 metres says, if appropriate, using a hearing aid he normally uses.U.K.

13.  People who know him well have difficulty in understanding what he says.U.K.

14.  When a person he knows well speaks to him, he has difficulty in understanding what that person says.U.K.

15.  At least once a year during waking hours he is in a coma or has a fit in which he loses consciousness.U.K.

16.  He has a mental illness for which he receives regular treatment under the supervision of a medically qualified person.U.K.

17.  Due to mental disability he is often confused or forgetful.U.K.

18.  He cannot do the simplest addition and subtraction.U.K.

19.  Due to mental disability he strikes people or damages property or is unable to form normal social relationships.U.K.

20.  He cannot normally sustain an 8 hour working day or a 5 day working week due to a medical condition or intermittent or continuous severe pain.U.K.

PART 2U.K.

21.  As a result of an illness or accident he is undergoing a period of habilitation or rehabilitation.U.K.

Regulation 20(1)

SCHEDULE 2U.K. MAXIMUM RATES OF THE ELEMENTS OF A WORKING TAX CREDIT

Relevant element of Working Tax CreditMaximum annual rate

1.Basic element

£1,525

2.Disability element

£2,040

3.30 hour element

£620

4.Second adult element

£1,500

5.Lone parent element

£1,500

6.Severe disability element

£865

7.50 plus element—

(a)in the case of a person who normally undertakes qualifying remunerative work for at least 16 hours but less than 30 hours per week; and

£1,045

(b)in the case of a person who normally undertakes qualifying remunerative work for at least 30 hours per week

£1,565

Explanatory Note

(This note is not part of the Regulations)

These Regulations prescribe the conditions of entitlement for the elements of working tax credit introduced by the Tax Credits Act 2002 (c.21) (“the Act”).

Regulation 1 provides for the citation, commencement and effect of the Regulations and regulation 2 for interpretation.

Working tax credit must, by virtue of section 11 of the Act, include a basic element and a disability element. Other elements may be prescribed in accordance with that section. Regulation 3 prescribes six additional elements: a 30 hour element, a second adult element, a lone parent element, a child care element, a severe disability element and a 50 plus element. Regulation 3(2) imposes a requirement that, in order to be entitled to the other elements, a claimant must first be entitled to the basic element.

Regulation 4 specifies the normal conditions of entitlement to the basic element. The principal requirements are that the claimant is working at the date of claim (or expects to do so within 7 days of the claim), satisfies the second condition imposed by regulation 4(1) as to the number of hours worked per week, the work is expected to last for at least 4 weeks from the date of claim, or the starting date if later and the work is done for payment or in the expectation of payment.

Regulation 5 provides a modification of the requirement as to the number of hours of qualifying remunerative work in the case of a woman to whom statutory maternity pay or maternity allowance is payable.

Regulation 6 provides a modification of the requirement as to the number of hours of qualifying remunerative work in relation to periods when statutory sick pay is payable or, in the case of a self-employed worker, would have been payable if his earnings and hours of work would have qualified him for statutory sick pay in the week before the claim for working tax credit was made if he had been engaged under a contract of service and his earnings had been derived under that contract.

Regulation 7 provides for the disregard of periods of customary holiday in reckoning whether the hours of work requirements are met in the case of people working at schools or other educational establishments with a recognisable cycle of work.

Regulation 8 provides a special rule in respect of those with short gaps between jobs so as to allow them to claim during the gap.

Regulation 9 prescribes the conditions of entitlement to the disability element and introduces Schedule 1, Part 1 of which prescribes the disabilities from which a claimant must be suffering in order to be entitled. Part 2 of the Schedule prescribes a condition which may be satisfied instead in the case of a person making an initial claim.

Regulation 10 prescribes the conditions of entitlement to the 30 hour element.

Regulation 11 prescribes the conditions of entitlement to the second adult element.

Regulation 12 prescribes the conditions of entitlement to the lone parent element.

Regulations 13 and 14 prescribe the conditions of entitlement to the child care element. Regulation 15 prescribes the method of calculating the amount of relevant child care charges and regulation 16 the situations in which a change of circumstances give rise to a recalculation of the child care element.

Regulation 17 prescribes the conditions of entitlement to the severe disability element and regulation 18 those relating to the 50 plus element.

Regulation 19 prescribes a special rule in relation to working tax credit payable by reference to responsibility for a child or qualifying young person where the child or qualifying young person dies. Working tax credit continues to be payable for the period for which child tax credit is payable under regulation 6 of the Child Tax Credit Regulations 2002.

Regulation 20(1) and Schedule 2 prescribe the maximum rate for the various elements of working tax credit, other than the child care element. Regulation 20(2) and (3) prescribe the maximum rate for the child care element.

A regulatory impact assessment in respect of the effects of the Act has been prepared and placed in the Library of both Houses of Parliament and is available on the Inland Revenue website (www.inlandrevenue.gov.uk).