Tax Credits, Child Benefit and Guardian's Allowance Debate
Full Debate: Read Full DebateSteve Barclay
Main Page: Steve Barclay (Conservative - North East Cambridgeshire)Department Debates - View all Steve Barclay's debates with the HM Treasury
(3 years, 9 months ago)
Written StatementsThe Government will bring forward regulations that will increase most tax credits rates and thresholds and will increase the Child Benefit and Guardian’s Allowance rates in line with the general rise in prices as measured by the September 2020 Consumer Price Index (CPI). CPI has been the default inflation measure for the Government’s statutory annual review of benefits since 2011.
The annual uprating of benefits will take place for tax credits from the start of the new tax year and for Child Benefit and Guardian’s Allowance in the first full week of the 2021-22 tax year. In 2021, this will be 6 April for tax credits and 12 April for Child Benefit and Guardian’s Allowance.
The Government are committed to supporting those who need it most. The annual up-rating process takes into account a variety of measures:
The majority of elements and thresholds in Working Tax Credit and Child Tax Credit will be increased by September’s CPI figure (0.5%) from April 2021. In line with established practice and the Office for Budget Responsibility’s expectations in their welfare forecast, the maximum rate of the childcare element, the family element, the withdrawal rate and the income disregards will remain unchanged.
The 0.5% increase will be applied to the rate of the Working Tax Credit basic element announced by written ministerial statement on 4 November 2019 (£1,995). The statutory annual review of benefits is separate from the temporary £20 per week uplift to the Working Tax Credit basic element and the Universal Credit standard allowance, which was announced as a temporary measure in March 2020, and enacted for one year under different legislation in response to the public health emergency. As we have done throughout this crisis, we will continue to assess how best to support low-income families, which is why we will look at the economic and health context in the new year.
Child Benefit will be increased in line with CPI (0.5%) from April 2021.
As set out in legislation, Guardian’s Allowance will be uprated in line with prices, measured by CPI (0.5%).
The full list of proposed benefit and credit rates will be placed in the Libraries of the House in due course.
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