Clause 34 - Recovery of top-up payments where tax credits award made on a review

Childcare Payments Bill – in a Public Bill Committee at 9:25 am on 28th October 2014.

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Question proposed, That the clause stand part of the Bill.

Photo of Anne Main Anne Main Conservative, St Albans

With this it will be convenient to discuss clauses 35 to 37 stand part.

Photo of Lucy Powell Lucy Powell Shadow Minister (Education)

It is a pleasure to serve under your chairmanship on this final day of the Committee, Mrs Main.

We have only a few issues to raise regarding clauses 34 to 37, which outline how top-up payments will be recovered in a number of circumstances relating to tax credits and universal credit. I want to take the opportunity to raise again some of the important issues we discussed last week relating to the information that is to be made available to parents so that they have the correct advice when moving between schemes and can make informed choices. As we discussed, their decisions will be complicated.

We also heard last week that the timetable for universal credit has been pushed back further and that there is a possibility that the Government are considering changing the hours rules so that parents will have to work longer to qualify for support. Will the Minister clarify the issues arising from that? The system is so complicated, with variables not only in child care costs but in hours worked, pay received, other benefits received and so on, that it will be incredibly difficult for families on the borderline to know under which scheme they will be better off. We would like that to be addressed in these clauses.

Photo of Priti Patel Priti Patel The Exchequer Secretary

Clauses 34 to 37 set out the rules that will allow HMRC to recover top-up payments when a parent receives a backdated tax credit or universal credit award payment following a successful review or appeal. The Government do not intend to provide duplicate support for child care under the new scheme, so tax credits or universal credit will require a mechanism to deal with such scenarios.

The clauses will apply when a person or their partner has asked for a review of, or appeals against, a decision to refuse or end a tax credit or universal credit award, and then claims support under the new scheme while the review or appeal is conducted. If the review is successful, the parent will receive a backdated tax credit or universal credit payment, and HMRC will recover the top-up payments received for that same period.

Clause 34 allows HMRC to recover the Government top-up payments when there is a backdated tax credit payment following a successful review that covers a period in which a parent claims support under the new scheme. Clause 35 provides for similar rules that allow HMRC to recover the top-up payment when there has been a backdated tax credit payment following a successful appeal.

Clause 36 permits HMRC to recover top-up payments in cases in which a parent has received a backdated universal credit payment for the same period, following a review. It mirrors the provision for tax credits in clause 34 that I have just mentioned. Clause 37 allows HMRC to recover top-up payments when there has been a backdated universal credit payment for the same period following a successful appeal.

Question put and agreed to.

Clause 34 accordingly ordered to stand part of the Bill.

Clauses 35 to 38 ordered to stand part of the Bill.