Carers Allowance affecting Child Tax Credits issue

themidnitesky

Hi everyone,

Does Carers Allowance have an effect on Chikd Tax Credit payments?

My cousin is 15 and in full time education. His mum and dad receive ESA (IB) as a couple as his mum is severely disabled and receives PIP at both the enhanced rates. His dad receives Carers Allowance for caring for his mum full time.

They receive Child Tax Credits for their son

The dwp deduct the amount they receive for CA from the ESA they receive and CA and Child behedot are also paid separately.

They've received these benefits for over 10 years but suddenly received a letter from HMRC saying that they may have been overpaid all of the CA because they also receive Child Tax Credits for the year 2022-2023 and may have to repay the CA payments from April 2022.

Is this correct as they already have the CA payments deducted from their ESA payments but are paid separately for CA.

I didn't thing CTC payments were affected by CA payments.

They've never said anything about this for the previous 9 years when the same benefits were received.

Any advice would be much appreciated.

Thanks.

Joe

calcotti

Carers Allowance is a taxable benefit so has to be included in your taxable income when reporting your income to Tax Credits. CA can therefore reduce the CTC payable, however in the situation you describe it will not make a difference. Getting income based ESA automatically gives rise to a maximum CTC award.

I can't think of any reason why receiving CTC would prevent payment of CA. The only restriction on CA is not earning more than £132/week from work (less in earlier years).

However you say that HMRC have told you that you have been overpaid CA. That doesn't make sense because HMRC do not administer CA. CA is administered by DWP so if there were any doubt about an overpayment of CA the letter would come from DWP.

Does the letter include a calculation?

themidnitesky

calcotti said:

Carers Allowance is a taxable benefit so has to be included in your taxable income when reporting your income to Tax Credits. CA can therefore reduce the CTC payable, however in the situation you describe it will not make a difference. Getting income based ESA automatically gives rise to a maximum CTC award.

I can't think of any reason why receiving CTC would prevent payment of CA. The only restriction on CA is not earning more than £132/week from work (less in earlier years).

However you say that HMRC have told you that you have been overpaid CA. That doesn't make sense because HMRC do not administer CA. CA is administered by DWP so if there were any doubt about an overpayment of CA the letter would come from DWP.

Does the letter include a calculation?

Hi @calco@calcotti

Thank you for your reply.

Sorry I may have been rather confusing.

The letter came from HMRC Tax Credit Office.

Tac Credits are stating that as they received CA to the sum of  just over £3500 for the year 2022-2033, they may have been overpaid Tax Credits.

But they've not given any calculation or said categorically that they have been overpaid only that they may have been.

All rather odd as they have been receiving the same for the past 10 or so years.

They don't work as one us severely disabled and the other her carer.

Thanks

calcotti

themidnitesky said:
Sorry I may have been rather confusing.

I am now clear that HMRC say your CTC may have been overpaid whereas your opening post said that they said CA was overpaid.

In your circumstances you are entitled to maximum CTC because income ESA is in payment. See page 6 of this leaflet
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1064064/WTC2-2022.pdf

You’re entitled to the maximum amount of Child Tax Credit for your children if you get:
• Income Support

• income-based Jobseeker’s Allowance

• income-related Employment and Support Allowance 

• Pension Credit

Sounds as if the letter you have received has been automatically produced as a result of data matching (and possibly HMRC didn't know CA was in payment) without actually going into the details of your claim.

themidnitesky

Hi Calcotti,

Thank you and apologies for the confusion- I had to as my relatives exactly what the letter states and who it was from.

I have copied the I fo you've kindly offered and thank you so much for your advice.

Best wishes

Rosie2019

poppy123456

@Rosie2019 were you meant to leave a comment?

Rosie2019

Hi guys

I've received a similar letter for a similar amount for the same period.

I'm In receipt of income support and CA . I have my CA deducted from my income support and have for years ...
I was wondering if you have managed to get it sorted out with what outcome I'm so worried right now about it. 

Thanks 😊 

themidnitesky

@Rosie2019 hi, my relatives rang and spoke with Tax Credits who asked whether CA was in payment and what amounts are expected to be paid for the 2022/2023 period and they were told that CTC would be back in touch and send out a revised Annual Notice once they had worked everything out but should be within the next 30 days.  I'll update when they've contacted them.

The odd thing is that CTC knew that CA had been in payment for the last 10 years so will see.

destiny78

Hi I'm having the same problem ca is taken out of my income support, an ctc today said they have to check if it well affect the amount of ctc I get, but ca is taken out of my income support I'm on low income aswell hope someone can help me abit worried x

poppy123456

destiny78 said:

Hi I'm having the same problem ca is taken out of my income support, an ctc today said they have to check if it well affect the amount of ctc I get, but ca is taken out of my income support I'm on low income aswell hope someone can help me abit worried x

CA is always deducted in full from Income Support, they then pay you CA separately. A carers premium is always included with your IS.

As advised earlier on in the thread, carers allowance is taxable income but it shouldn't make any difference to your CTC and you should still be entitled to the maximum amount.

destiny78

Thank you Poppy 123456 x