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Clause 11 - Changes to child tax credit

Part of Welfare Reform and Work Bill – in a Public Bill Committee at 10:15 am on 13th October 2015.

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Photo of Damian Hinds Damian Hinds The Exchequer Secretary 10:15 am, 13th October 2015

I fear that that is another invitation to err from the path of the rightful debate.

On new clause 5, the intention seems to be to amend section 130A of the Social Security Contributions and Benefits Act 1992 to prevent the Secretary of State from making changes to housing benefit that would restrict the number of children who can be included in the housing benefit assessment. Housing benefit and the housing element in universal credit take into account the number of children for whom the claimant is responsible. There is no maximum number attached to that, and the Bill does not introduce one.

The only related changes to housing benefit, which will follow in regulations, are to ensure that a claimant’s housing benefit award is no higher than it would have been if the tax credit changes were not introduced. Obviously, without those changes, the tax credit change would have the unintended effect of awarding claimants with more than two children a higher amount of housing benefit, which would reduce the savings from the tax credit change.

Let me be absolutely clear, because the hon. Member for Islington South and Finsbury raised some very reasonable questions, which we need to address directly. As she knows, housing benefit is made up of a number of elements. That includes taking into account the number of children in calculating the family’s income. The family premium she mentioned is part of that calculation. The changes will affect the calculation of family income, but not the number of rooms allocated, which is a separate issue.