[2009] UKUT 42 (AAC) (24 February 2009)
IN THE UPPER TRIBUNAL Appeal No. CTC/2878/2008
ADMINISTRATIVE APPEALS CHAMBER
(1) The Claimant and her husband made a claim for and were awarded child tax credit in respect of the year 2006-7.
(2) On 9 February 2007 a claim for disability living allowance (DLA) was made in respect of their daughter (A). That claim, or rather the outcome of it, was potentially relevant to the amount of the child tax credit award in that the individual element of the maximum rate of child tax credit is increased in respect of a child in respect of whom DLA is payable. (s.9 of the Tax Credits Act 2002; regs. 7 and 8 of the Child Tax Credit Regulations 2002).
(3) The DLA claim was refused, and A appealed.
(4) On 12 July 2007 an award of child tax credit was made in respect of the year 2007-8.
(5) On 9 January 2008 the DLA appeal was successful. The middle rate of the care component was awarded from 9 February 2007.
(6) On 15 January 2008 the Claimant notified the Tax Credit Office by telephone that DLA had been awarded from 9 February 2007.
(7) On 17 January 2008 a revised award of child tax credit was made in respect of the period 6 April 2007 to 5 April 2008. The disability element in respect of A was included from 15 October 2007 (i.e. 3 months before the notification, on 15 January 2008, of the DLA award).
(8) On 23 January 2008 a further revised award of child tax credit in respect of the period 6 April 2007 to 5 April 2008 was made. By this decision the disability element in respect of A was included for the whole year.
(9) However, on 11 February 2008 the award was revised yet again, the decision maker being of the opinion that a mistake had been made in the decision of 23 January 2008. By this further revised decision the position under the decision of 17 January 2008 was reinstated: the disability element in respect of A was included only from 15 October 2007.
(10) The difference between the two positions was child tax credit amounting to £1280.64.
(1) The general rule, under regs. 20 and 25 of the Tax Credits (Claims and Notifications) Regulations 2002, is that a revision by reason of a change of circumstances which may increase the maximum rate of tax credit is backdated to the date 3 months before the date of notification of that change (or to the date of the change of circumstances if later). The maximum backdating is therefore to a date 3 months before the date of notification.
(2) That is relaxed in the particular circumstances set out in reg. 26A, sub-para (3) being the material provision in this case. However, that applies only where all the provisions of reg. 26A(3) are fulfilled. These require that there is:
(a) notification of the fact that a DLA claim has been made (but not yet determined)
(b) a decision by HMRC not to revise the tax credit award by reason of that change, the reason for that decision being that DLA has not been awarded
(c) a subsequent DLA award, followed by notification of that award.
(3) Where all the conditions of reg. 26A(3) are fulfilled, the notification of the award of DLA (and therefore the effective date of the revision of the tax credit award by reason of the award of DLA) is backdated to the date from which DLA is payable or (if later) the date of notification of the fact that a DLA claim had been made.
(1) It does not make sense to say that the making of a claim for DLA is a "change of circumstances" within the meaning of reg. 26A(3)(a). A change of circumstances occurs only when DLA is awarded, not when it is claimed. Under s.9 of the Tax Credits Act 2002 and reg. 8(2)(a) of the Child Tax Regulations 2002 it is the award of DLA which requires a disability element to be included in the maximum rate of child tax credit, not the claim for DLA.
(2) The mechanism for changing tax credit awards by reason of a change of circumstances is similar to that for social security benefits, and in relation to social security benefits regulations 6(2)(e) and 7(7) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 make clear that it is the award of the other relevant benefit which is the change of circumstances for supersession purposes, and that no process of "double notification" is required.
(3) In the absence of clear and express provision no process of double notification should be required. To do so would detract from the purpose of the provision for an additional payment in respect of disabled children.
(4) In the absence of any other guide the approach in paras. 32 to 35 of CTC/4390/2004 should be followed.
Charles Turnbull
Judge of the Upper Tribunal
24 February 2009