I also think expresstraining’s comment (9.4.2004) is right, with regard to the absence of relevant periods. Surely periods on qualifying benefits are not RPs at all. This is because the job of the RP is to set a common starting point for the TC calculation and means testing (the maximum TC figure). This is not needed when a person is on a qualifying benefit, because section 7(2) effectively disconnects the claimant from the need for further means testing. But this may not be the only time that there is no RP.
Take a couple aged 28 where one is working (over 30 hrs per week). No kids or disabilities etc. They claim TCs at the start of the tax year. For the first 20 weeks (period A) they get WTC. Then the worker is made redundant, and there is no work for 4 weeks (period B), but they do not claim any benefits. Then they have a baby, and claim IBJSA for 18 weeks, and get CTC (period C). Then he gets another f/t job, for the remaining 10 weeks of the year (period D).
In terms of relevant periods, there is period A, which is ended when the worker ceases to satisfy Reg 4 of the WTC (EMR) Regs (16 hour rule), and falls foul of Reg 8 (7 day gap rule). This means the RP up to then stops, because the maximum TC has changed (not entitled to basic component WTC). Pro rating applies to the number of days in period A, and applies to all of the calculation sequence. I nervously propose that there is no RP for period B, because there are no TC components that the couple are entitled to, so the question of a maximum TC does not apply. Reg 7(2) of the TC (ITDR) Regs defines the RP for WTC, when “the elements of WTC…to which the person or persons may be entitled, remain the same”. I am proposing this does not apply where there are no elements of entitlement.
Assuming there is no RP for period C (time spent on a qualifying benefit), the next RP is period D, because the couple have come off IS because of work, and are in principle entitled to a maximum TC figure. Again, pro rating applies, based on the number of days in period D.
So we can have an overall claim period as defined by section 5 of the TC Act, which contains periods when there are no RPs at all. Pro rating makes every thing all right in the end, and prevents the transition onto IS/IBJSA/GC (and therefore maximum CTC), from awarding the claimant too much TC in any one year. However, if there is an overpayment caused by an error or an unreported change of circumstances, the claimant can end up with too much TC for the year, as we all know.
Please put me out of misery if I am wrong.
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