Clause 8 - Entitlement
Tax Credits Bill
11:00 am
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
The tax credit will run normally in the same way as working families tax credit and child benefit now—up to the year in which the child becomes 16, although slight variations in the rules obtain in Scotland, Wales and Northern Ireland. We are following the child benefit rules—with the exception that the child remains in full-time statutory education—and current WFTC rules.
The hon. Gentleman is right to point out the interaction with the educational maintenance grants that are still being piloted. He mentioned the scenario of someone who was 18 years old or nearly 18 who had left school without completing their GSCEs, and asked whether we could include them in the scope of eligibility. That is confusing, and we do not believe that we could do that. We would need to determine that that was what they were doing previously. The qualifying trigger would be 16. The pilot is still running and we are awaiting the results. When we drafted the legislation we wanted to state that this was currently the appropriate way to deliver support to this group. However, it may be necessary to reconsider the issue when we see the results of the educational maintenance grants pilot.
The hon. Gentleman also made a point about a young person who leaves full-time education for a year or more and then returns. That young person appears to fit squarely within what is currently happening with the educational maintenance grants. There is also an issue about the purpose of the two payments. The Bill continues the practice, but it would be wrong of me not to flag up that we are not seeking to anticipate the outcome of the results of the educational maintenance grants pilot. If it turned out that Government policy was that that way was more favourable, it might be necessary to reconsider the extent to which the tax credit was paid once we passed the September in the year in which the qualifying child was 16. So long as the young person is in full-time education, as is the case with child benefit and WFTC, they will receive the tax credit up to their 19th birthday. That is nice and simple. Parents understand that provision in child benefit and have got used to it in WFTC. Until a policy change is made, that is how the tax credits will work. I hope that that answers the hon. Gentleman's questions.