The Exchequer Secretary to the Treasury (Mr David Gauke)
The Welfare Reform Bill introduces a new disability benefit, personal independence payment (PIP), which will replace disability living allowance (DLA) for working-age claimants from 2013-14. There are a number of existing tax reliefs relating to DLA, and suitable amendments to a number of pieces of tax legislation will be needed on the transition to PIP.
In line with the Government’s approach to tax policy making, legislation relating to these provisions will be published in draft form in due course, with appropriate amendments made in a future Finance Bill (or by Treasury Order if appropriate).
In line with this, the relevant provisions have been removed from the Welfare Reform Bill.
However, the Government have decided to retain the provision in the Welfare Reform Bill that will make PIP tax exempt, in order to provide absolute certainty that these payments will be free of tax.