Disabled Children: Tax Credit

Lord Low of Dalston Excerpts

Wednesday 30th November 2016 Lords Chamber

Asked by

[Lord Low of Dalston]

To ask Her Majesty’s Government what plans they have to compensate families looking after disabled children who lost the opportunity to claim the higher rate of tax credit between 2011 and 2014 due to an administrative error.

[Lord Young of Cookham (Con)]

My Lords, claimants were able to claim the higher rate of tax credits and many did so at the time. Although it is the claimant’s responsibility to inform HMRC of their eligibility, HMRC’s back-up practice was to take information from DWP to update awards automatically. Last week, we announced that HMRC would issue lump-sum payments to families affected by a breakdown in this back-up to cover what they would have received from 6 April 2016 and ensure that they get their entitlement in future.

[Lord Low of Dalston (CB)]

My Lords, I thank the Minister for that reply, but I am sure he would agree that we are dealing here with a major injustice: some 28,000 low-income families with disabled children have lost up to £4,400 a year for five years, all because, between 2011 and 2014, the DWP omitted the box from the relevant form for people to indicate whether or not they received tax credits. As the law currently stands, as the Minister has said, the onus is on the claimant to claim what they are entitled to. However, the system of tax credits is extremely complicated for anyone to understand. Does the Minister agree that the law should be changed to place the onus on the Revenue to pay claimants what they are entitled to, so long as they provide the right information about their circumstances? Will he give serious consideration to this?

[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.