Presumably all Tax Credit awards will be uprated with the new rates in April and all claimants sent an award letter and see an increase in their payments until their 2004/5 award is estimated??

As this is an increase in income claimants getting TC's and HB will have to inform HB dept.

However, don't HB depts have the discretion to ingore the increase in Tax Credit award due to uprating for 30 weeks.Presumably to avoid doing 2 reassessments.

Many will then give IR their 2003/4 income details and their TC award may change again.

If the amount in payment goes down (and I guess many will do due to overpayments) the claimant can take the award letter into their HB dept and be awarded more HB or be able to make a claim for HB.

If the amount goes up the claimant will have to take the award letter into HB and amount of HB wili go down.

My question is how many HB depts will actually use the discretion??

Also, should we be advising people who get TC's and HB to take Tax Credit uprating letter to HB (as increase in income) but requesting it is ignored for 30 weeks whilst their 2003/4 claim is finalised and 2004/5 award estimated.

And how should we approach any overpayments if claimant doesn't inform HB straight away of increase in TC due to uprating and HB don't use discretion??

Many thanks for any comments.

I've not read through your whole posting, but to react to the assumption tax credits awards are not simply uprated in April. My understanding is that a final notice is sent out with the details that have been used for this year. These are confirmed or amended and used to determine actual entitlement for 03/4 year and to make an award for 04/5. until a decision is made on the existing award should continue at the 03/04 rates.

There is no uprating excercise for TC. What happens is, in theory, that:

TC will continue in payment at the current rate

Some weeks in the future, the IR will finalise the 03/04 rate of income (don't ask about the self employed ). This will be used to adjust any payment received during 03/04 and to set the PY rate for TC during 04/05.

If clients wish to move to a CY basis they can then provide an estimate of their anticipated income during 04/05 and ask IR to make payments on that basis. Remember that that may cost quite a lot of lost HB if the CY income is higher than the PY income.

You will see the potential number of reassessments which a HB department could have to carry out might be quite large, hence the 30 week window.

More interesting, I think, is the opportunity that this gives for a bit of local income generation.

If the LA decide to use the 30 weeks, where possible, for everyone who is likely to have an increased TC figure (which of course they could tell from the information provided to them by claimants) then they could bring some extra money into the local economy.

If they take no account of TC increases when they occur and are notified then:

The HB/CTB will be paid on the basis of a lower assessable income and will therefore be higher.
More HB in the pockets of those on rent allowances, more spend in local economy, less rent arrears.
Less rent arrears for rent rebate cases.
No impact on subsidy received from government to LA
No overpayments for claimants.

Win Win for local authority.

Just read this in hbinfo regarding payments of TC from April - it suggests Uprating will be made in April - can anyone confirm??

So they make temporary payments calculated as follows:

- the same income they used for the 03/04 award (i.e. 01/02 tax year or changed amount that the claimant has reported in-year)
- the same family and employment details
- 04/05 uprated elements and thresholds

The only change from the rate currently in payment should be a slight increase for the uprated elements. LAs can disregard this under the 30-week rule (Reg 26). So you leave your tax credit income unchanged for HB purposes. By the end of 30 weeks, the IR should have completed its 04/05 assessment.