The Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002

2

• (1) In these Regulations, except where the context otherwise requires—

• “the Act” means the Tax Credits Act 2002, and a reference without more to a numbered section is a reference to the section of the Act bearing that number;

• “armed forces independence payment’’ means armed forces independence payment under the Armed Forces and Reserve Forces (Compensation Scheme) Order 2011;

• “the Board” means the Commissioners of Inland Revenue;

• “the Contributions and Benefits Act” means the Social Security Contributions and Benefits Act 1992 ;

• “child” has the same meaning as it has in the Child Tax Credit Regulations 2002 ;

• “claim” means a claim for working tax credit and “joint claim” and “single claim” have the meanings respectively assigned in section 3(8);

• “claimant” means the person making a claim and, in the case of a joint claim, means either of the claimants;

• “contributory employment and support allowance” means a contributory allowance under Part 1 of the Welfare Reform Act (“the 2007 Act”) as amended by the provisions of Schedule 3, and Part 1 of Schedule 14, to the Welfare Reform Act 2012 that remove references to an income-related allowance, and a contributory allowance under Part 1 of the 2007 Act as that Part has effect apart from those provisions;

• “coronavirus” means severe acute respiratory syndrome coronavirus 2;

• “Coronavirus Job Retention Scheme” means the scheme of that name established under the direction given by the Chancellor of the Exchequer under section 76 of the Coronavirus Act 2020 on 15th April 2020 (as that Scheme has effect from time to time);

• “coronavirus-impacted worker” has the meaning given by regulation 7E(3); and

• “couple” has the meaning given by section 3(5A) of the Act

• “the determination of the maximum rate” means the determination of the maximum rate of working tax credit;

• “employed”, except in the expression “self-employed”, means employed under a contract of service or apprenticeship where the earnings under the contract are chargeable to income tax as employment income under Parts 2 to 7 of the Income Tax (Earnings and Pensions) Act 2003 otherwise than by reason of Chapter 8 of Part 2 of that Act (deemed employment in respect of arrangements made by intermediaries).;

• “employment zone” means an area within Great Britain—subject to a designation for the purposes of the Employment Zones Regulations 2003 by the Secretary of State, orlisted in the Schedule to the Employment Zones (Allocation to Contractors) Pilot Regulations 2006pursuant to section 60 of the Welfare Reform and Pensions Act 1999;

• “employment zone programme” means a programme which is—established for one or more employment zones, anddesigned to assist claimants for a jobseeker’s allowance to obtain sustainable employment;

• “furloughed employee under the Coronavirus Job Retention Scheme” means a person who is within paragraph 6.1 of the Schedule to the direction given by the Chancellor of the Exchequer under section 76 of the Coronavirus Act 2020 or a person who is within paragraph 10.1 of the Schedule to the further direction given by the Chancellor under section 76 of that Act on 25th June 2020;

• “initial claim” shall be construed in accordance with regulation 9A;

• “limited capability for work credit” refers to a credit under regulation 8B(1) of the Social Security (Credits) Regulations 1975 where paragraph (2)(a)(iv) or (2)(a)(v) of that regulation applies, and which follows the cessation of the entitlement period of contributory employment and support allowance;

• “local authority” means—in relation to England, the council of a county or district, a metropolitan district, a London Borough, the Common Council of the City of London or the Council of the Isles of Scilly;in relation to Wales, the council of a county or county borough; or,in relation to Scotland, a council constituted under section 2 of the Local Government, etc. (Scotland) Act 1994 ;

• “partner” means a member of a ... couple making a joint claim;

• “patient” means a person (other than a person who is serving a sentence, imposed by a court, in a prison or youth custody institution or, in Scotland, a young offenders’ institution) who is regarded as receiving free in-patient treatment within the meaning of the Social Security (Hospital In-Patients) Regulations 2005;

• “period of award” shall be construed in accordance with section 5;

• “personal independence payment” means personal independence payment under Part 4 of the Welfare Reform Act 2012;

• “qualifying young person” means a person who satisfies regulation 5 of the Child Tax Credit Regulations 2002;

• “relevant child care charges” has the meaning given by regulation 14;

• “Scottish disability assistance” means a payment made by the Scottish ministers under section 31 of the Social Security (Scotland) Act 2018;

• ...

• “self-employed” means engaged in carrying on a trade, profession or vocation on a commercial basis and with a view to the realisation of profits, either on one’s own account or as a member of a business partnership and the trade, profession or vocation is organised and regular;

• “sports award” means an award made by one of the Sports Councils named in section 23(2) of the National Lottery etc. Act 1993 out of sums allocated to it for distribution under that section;

• “surrogate child” means a child in respect of whom an order has been made under section 30 of the Human Fertilisation and Embryology Act 1990 (parental orders) or section 54 of the Human Fertilisation and Embryology Act 2008 (parental orders);

• ...

• “training allowance” means an allowance (whether by way of periodical grants or otherwise) payable—out of public funds by a Government department or by or on behalf of the Secretary of State, Scottish Enterprise or Highlands and Islands Enterprise or the Department for Communities or the Department for the Economy (“the relevant paying authority”);to a person in respect of his maintenance or in respect of a member of his family; andfor the period, or part of the period, during which he is following a course of training or instruction—provided by, or in pursuance of arrangements made with, the relevant paying authority, orapproved by the relevant paying authority in relation to him,but does not include an allowance, paid by a Government department, Northern Ireland department or the Scottish Executive to or in respect of a person by reason of the fact that he is training as a teacher, or is following a course of full-time education, other than under arrangements made under section 2 of the Employment and Training Act 1973 , section 2 or 3 of the Disabled Persons (Employment) Act (Northern Ireland) 1945 , or section 1(1) of the Employment and Training Act (Northern Ireland) 1950 ;

• “training for work” shall be construed in accordance with regulation 9B;

• “week” means a period of seven days beginning with midnight between Saturday and Sunday.

• “the Welfare Reform Act” means the Welfare Reform Act 2007.

• (2) For the purposes of these Regulations a person is responsible for a child or qualifying young person if he is treated as being responsible for that child or qualifying young person in accordance with the rules contained in regulation 3 of the Child Tax Credit Regulations 2002.

• (3) A reference in these Regulations to an enactment applying to Great Britain but not to Northern Ireland shall, unless the context otherwise requires, include a reference to the corresponding enactment applying in Northern Ireland.

• (4) In these Regulations as they apply to an office a reference to being employed includes a reference to being the holder of an office.

• (5) For the purpose of these Regulations—

• (a) two or more periods of entitlement to employment and support allowance are linked together if they satisfy the conditions in regulation 145 of the Employment and Support Allowance Regulations 2008 or regulation 86 of the Employment and Support Allowance Regulations 2013 ; and

• (b) a period of entitlement to employment and support allowance is linked together with a period of entitlement to statutory sick pay if it follows that period within 12 weeks.

3

• (1) For the purposes of determining the maximum rate of working tax credit, in addition to the basic element and the disability element , the following elements are prescribed—

• (a) a 30 hour element;

• (b) a second adult element;

• (c) a lone parent element;

• (d) a child care element; and

• (e) a severe disability element; ...

• (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) It is a condition of entitlement to the other elements of working tax credit that the person making the claim for working tax credit is entitled to the basic element.

• (3) If the claim for working tax credit is a joint claim, and both members of the couple satisfy the conditions of entitlement for—

• (a) the disability element, or

• (b) the severe disability element, ...

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

the award must include two such elements.

Case A

For at least one day in the 182 days immediately preceding the making of the claim the claimant, or, in the case of a joint claim, at least one of the claimants, must have been in receipt of the higher rate of short-term incapacity benefit, long-term incapacity benefit or severe disablement allowance .

Case B

For at least one day in the 182 days immediately preceding the making of the claim the applicable amount for the claimant, or, in the case of a joint claim, at least one of the claimants, must have included a higher pensioner or disability premium determined—

• (a) in the case of income support, in accordance with paragraphs 10(1)(b) or (2)(b) or 11, and 12, of Part III of Schedule 2 to the Income Support (General) Regulations 1987 ;

• (b) in the case of income-based jobseeker’s allowance, in accordance with paragraph 12(1)(a), (b)(ii) or (c) or 13, and 14 of Schedule 1 to the Jobseeker’s Allowance Regulations 1996 ;

• (c) in the case of housing benefit, in accordance with paragraphs 10(1)(b) or (2)(b) or 11, and 12 of Part III of Schedule 2 to the Housing Benefit (General) Regulations 1987 ;

• (d) in the case of council tax benefit, in accordance with paragraphs 11(1)(b) or (2)(b) or 12, and 13 of Part III of Schedule 1 to the Council Tax Benefit (General) Regulations 1992 .

Case C

At the date of the claim there is payable to the claimant, or in the case of a joint claim, to at least one of the claimants—

• (a) a disability living allowance;

• (b) an attendance allowance;

• (c) a mobility supplement or a constant attendance allowance which is paid, in either case, in conjunction with a war pension or industrial injuries disablement benefit.

Case D

At the date of the claim the claimant, or, in the case of a joint claim, one of the claimants, has an invalid carriage or other vehicle provided under section 5(2)(a) of, and Schedule 2 to, the National Health Service Act 1977 , section 46 of the National Health Service (Scotland) Act 1978 or Article 30(1) of the Health and Personal Social Services (Northern Ireland) Order 1972 .

Case E

The claimant, or in the case of a joint claim, one of the claimants must—

• (a) have—

• (i) received, on account of his incapacity for work, statutory sick pay, occupational sick pay, short term incapacity benefit payable at the lower rate or income support, for a period of 140 qualifying days; or

• (ii) been credited with Class 1 or Class 2 contributions under the Contributions and Benefits Act for a period of 20 weeks on account of incapacity for work;

where the last of those days or weeks (as the case may be) falls within 56 days of the making of the claim; and

• (b) have a disability, at the date of claim, which is likely to last for at least six months, or for the rest of his life if his death is expected within that time; and

• (c) have gross earnings which are less than they were before the disability began by at least the greater of 20 per cent. and £15 per week.

For the purpose of this Case “qualifying days” are days which form part of a single period of incapacity for work within the meaning of Part 11 of the Contributions and Benefits Act.

Case F

The claimant or, in the case of a joint claim, at least one of the claimants must have been—

• (a) undertaking training for work for at least one day in the 56 days immediately preceding the claim; and

• (b) receiving long-term incapacity benefit, severe disablement allowance or the higher rate of short-term incapacity benefit within 56 days before the first day of that training.

Here “training for work” means training for work received—

• (a) in pursuance of arrangements made under section 2(1) of the Employment and Training Act 1973, section 2(3) of the Enterprise and New Towns (Scotland) Act 1990 or section 1(1) of the Employment and Training Act (Northern Ireland) 1950 ; or

• (b) on a course which a person attends for 16 hours or more a week and the primary purpose of which is the teaching of occupational or vocational skills.

• (3) If—

• (a) a claim for working tax credit is made or treated as made not later than the end of 8 weeks commencing with the last day of the claimant’s previous award,

• (b) on the claim which resulted in that award the claimant qualified for the disability element by virtue of falling within Case A, Case B or Case E of paragraph (2), and

• (c) the claimant satisfies regulation 9(1)(a),

he shall be treated on the claim mentioned in sub-paragraph (a) as if he still qualified as mentioned in sub-paragraph (b).

• (4) In the case of an initial claim for working tax credit paragraph (3) shall have effect as if—

• (a) in sub-paragraph (a) for “the claimant’s previous award” there were substituted “ the claimant’s last award for disabled person’s tax credit ”; and

• (b) in sub-paragraph (b) for the words from “the disability element” to the end there were substituted “ that tax credit by virtue under subsection (2) or (2C) of section 129 of the Contributions and Benefits Act ”.

• (5) A person who satisfies paragraph (1)(c) is to be treated, for the purposes of the Act, as having a physical or mental disability which puts him at a disadvantage in getting a job.

Calculation of relevant child care charges

Change of circumstances

Relevant element of working tax credit	Maximum annual rate
1. Basic element	£2,435
2. Disability element	£3,935
3. 30 hour element	£1,015
4. Second adult element	£2,500
5. Lone parent element	£2,500
6. Severe disability element	£1,705

Editorial notes