Disabled Children: Tax Credit

Lord Davies of Oldham Excerpts

Wednesday 30th November 2016 Lords Chamber

[Lord Young of Cookham]

I am grateful to the noble Lord for that suggestion. HMRC will be contacting the 28,000 families directly, automatically adjusting their award and by the end of January making a lump-sum payment backdated to April 2016. I am sure his suggestion of a future change to the law will be looked at sympathetically in order to try to streamline the system and to avoid the problems that he has identified in his Question.

[Lord Davies of Oldham (Lab)]

My Lords, the Government acknowledge the administrative error in the failure to pay the full entitlement for five years. I want to know, as I am sure does the House, on what principle the decision was taken by the Government, knowing that the families have no recourse to law, that the Treasury should shoulder something less than 10% of the total cost and the families should bear 90%.

[Lord Young of Cookham]

That is a question that I asked myself earlier this morning. The answer is that HMRC cannot by law backdate beyond the present tax year except in exceptional circumstances, and the circumstances where someone has failed to claim do not qualify. So there would be a risk of legal challenge were HMRC to compensate people in the way that the noble Lord has suggested.