I was involved with a thread on a similar topic some time ago, but it was not resolved and I wonder if anyone has any further advice. My client will be entitled to some housing costs when his mortgage costs are taken into account, but receipt of IS would give him max entitlement to Tax Credits and this would "float him off" IS. If he doesn't claim IS he will not get help with his housing costs or the max tax credits. Is there a solution to this? He works 18 hours a week and has 2 disabled children.

Just wondering if you ever got any answers on this one as to what the authorities do in practice??

Hi Sue

The answer is that I discussed this with SSU and the summary of their advice was:

"It is possible for the client to claim IS be refused and then reclaim after the waiting period to get housing costs paid. However, if HMRC realise IS is in payment they will increase entitlement to WTC thereby ending entitlement to IS. There is a danger that the client will be overpaid WTC if HMRC discover IS is or has been in payment. The client could make an application for IS with the knowledge that this may cause difficulty with WTC in the future.

There does not appear to be a way to avoid IS entitlement causing an increase in WTC which in turn removes entitlement to IS which then causes WTC entitlement to end. I know you have raised this as a social policy issue and I'm afraid that I cannot think of another way to address the problem. It is unusual for the above scenario to occur as not many people have the potential to be entitled to both WTC and IS."

I also spoke to IS and HMRC but neither were able to answer or seemed to be particularly bothered about it. The client, who was given various options including giving up work or reducing hours to the level where he could not get WTC, did not come back so I don't know the outcome.

I would be interested to hear if anyone else knows how this situation is treated by the relevant offices.

Regards
Anne