Carers and the 50+ element of working tax credit

Published on 12 December 2007

LITRG has had enquiries from people over 50 who are receiving carer’s allowance, asking whether they are entitled to the 50 element of working tax credit (WTC) on going back to work. Our analysis says they can; HMRC disagrees.

The 50 element is payable for up to 12 months where the claimant (or at least one of them if the claim is a joint one):

  • is aged 50 or over;
  • starts work;
  • works for at least 16 hours a week; and
  • satisfies one of five other conditions

In our view, one of these five conditions is that the claimant (or partner) is receiving carer’s allowance, bereavement allowance or widowed parent’s allowance. HMRC disagree with us, and their view is expounded in WTC2 and in the notes to TC600.

We would be interested to hear the views of claimants who have tried to claim the credits and from other advisers. If we are right, then the standard advice to claimants must be to appeal to the Tribunal if they are refused the 50 element.

The technical analysis is below for those that are interested in such things!

Technical analysis

Our view is based on the wording of Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002/2005, reg 18(3)(d), which states that the claimant must satisfy the condition in ‘paragraph (4), (6), (7), (8) or (9)’ (our italics). Paragraph (9) states:

‘The condition is that the claimant, or, in the case of a joint claim, one of the claimants, is receiving:

  1. carer’s allowance;
  2. bereavement allowance; or
  3. widowed parent’s allowance.’

The use of the conjunction ‘or’ in reg 18(3)(d) makes it clear, in our view, that para (9) is a stand-alone paragraph not reliant on any other.

However, HMRC take the view that para (9) has to be read in conjunction with para (8)(b) and (c). Their argument is as follows:

‘Regulation 18(9) must be read in conjunction with regulation 8(8)(b) and (c). These provisions mean that immediately prior to the period during which certain benefits (as listed in paragraph 5) were received, the claimant had been receiving one of the allowances mentioned in paragraph (9). So Carer’s Allowance, Bereavement Allowance and Widowed Parent’s Allowance can count towards the 6 months (in conjunction with the benefits mentioned in regulation 18(5)), but they are not – on their own – qualifying benefits for the 50plus element. The TC600 Guidance Notes on box 4.4 of the tax credits claim form make this clear.’

Whilst we agree that regulation 18(8)(b) and (c) must be read in conjunction with 18(9) we also believe that additionally 18(9) can be a stand alone paragraph. If the benefits mentioned in para (9) were not, on their own, qualifying benefits, then reg 18(3)(d) would have read:

'he satisfies the condition in paragraph (4), (6), (7) or (8).'

Then para (9) would be dependent for its effect upon para (8), as HMRC suggest. But in fact reg 18(3)(d) reads:

'he satisfies the condition in paragraph (4), (6), (7), (8) or (9).'

We think that the words in italics therefore give (9) the same status as the other paragraphs cited, i.e. it is a qualifying condition by itself without reference to any other.

(12-12-2007)

Contact Name: Victoria Todd (Tel: 0844 579 6700 Fax 0844 579 6701)