Commentary on Sections Schedule 24 – Social security, child support and tax credits Part 14 - Amendments of the Tax Credits Act 2002 (c. 21)
896.Paragraph 144 (2) amends section 3(3)(a) of the Tax Credits Act 2002 by replacing existing references to a married or unmarried couple with a single reference to a “couple”. This will provide that joint tax credit claims may be made by same-sex couples in the same way as joint claims by married and unmarried opposite-sex couples.
897.Paragraph 144(3) deletes subsections (5) and (6) in section 3 of the Tax Credits Act, which respectively define a “married couple” and an “unmarried couple”, and replaces them with a new subsection (5A) to define the term “couple”. This definition includes married and unmarried opposite-sex couples and civil partnerships in which the civil partners are neither formally separated nor separated and likely to remain so permanently. The definition also extends to same-sex couples in which the parties are not civil partners but are living together as if they were civil partners.
898.Paragraphs 145 and 146 amend various sections in the Tax Credits Act.
899.Section 4 allows for detailed rules about tax credit claims to be set out in regulations. In particular, subsection (1)(g) provides that in certain circumstances, the regulations enable one member of a married or unmarried couple to be treated as acting on behalf of the other member when making a joint claim, for example when responding to an end-of-year notice to renew a tax credit award. These regulations are in the Tax Credits (Claims and Notifications) Regulations 2002 (S.I. 2002 No. 2014, as amended by S.I. 2003 No. 3240). Subsection (1)(g) is amended to allow the regulations to be extended in due course to provide that a claim made by one party in a couple, whether opposite-sex or same-sex, is to be treated in prescribed circumstances as also made by the other party in that couple.
900.Section 11 provides for the elements making up the working tax credit to be set out in regulations. By virtue of subsection (6)(b) and (c) respectively, a working tax credit award may include an element for being a member of a married or unmarried couple or for being a lone parent who is not a member of a married or unmarried couple. These elements are described as the “second adult element” and the “lone parent element” in regulations 3(1), 11 and 12 of the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002 (S.I. 2002 No. 2005, as amended by S.I. 2003 No. 701 and S.I. 2003 No. 2815). Subsection (6)(b) is amended so that entitlement to the second adult element may extend to being a member of a same-sex couple. Subsection (6)(c) is amended to refer to a person not being a member of a couple, whether opposite-sex or same-sex, but who is responsible for a child or qualifying young person.
901.Section 17 provides that the Inland Revenue should send recipients of a tax credit award a notice after the end of each tax year. The notice requires the recipients to confirm that the circumstances affecting their entitlement (such as the number of children, whether a recipient is disabled, and the level of income) are as stated in the notice or, if different, to say how they differ. This must be done within the time limit specified in the notice. Subsection (10)(b) enables regulations to be made setting out the circumstances in which one member of a married or unmarried couple is taken to be acting for the other in responding to the notice. The regulations are in the Tax Credits (Claims and Notifications) Regulations 2002, referred to above. Subsection (10)(b) is amended to refer to members of a couple, whether opposite-sex or same-sex, so that appropriate changes may be made in due course to the regulations.
902.Section 24 provides that payment of a tax credit award must be made to the person to whom that award has been made. Subsection (2) provides that in the case of a married or unmarried couple receiving a joint tax credit award, regulations are to prescribe to whom payment is to be made. These regulations are in the Tax Credits (Payments by the Board) Regulations 2002 (S.I. 2002 No. 2173). Subsection (2) is amended to add a reference to an award made to members of a couple, whether opposite-sex or same-sex, to enable appropriate changes to be made to the regulations in due course.
903.Section 32 provides that penalties may be imposed on a person (whether the tax credit claimant or an employer) who fails to comply with a request by the Inland Revenue to supply information or evidence in connection with a tax credit claim. Subsection (2) provides for an initial penalty of £300 followed by a further penalty of up to £60 a day for each day on which the failure to supply information or evidence continues after the imposition of the initial penalty. Subsection (6) provides that the penalties to be imposed on the members of a married or unmarried couple are not to exceed the aggregate limits contained in subsection (2). Also, if both members of a married or unmarried couple fail to notify the Inland Revenue of changes in circumstances which may reduce their tax credit award, then the aggregate amount of the penalty imposed on that couple must not exceed £300. Subsection (6) is amended so that the same penalty provisions will apply, when appropriate, in respect of tax credit claims made jointly by a same-sex couple.
904.Paragraph 147 (2) inserts a definition of “couple” in the list of terms in the new subsection (1) of section 48. This refers to the new subsection (5A) of section 3 of the Tax Credits Act inserted by paragraph 144(3) of this Schedule. The paragraph also deletes the definitions of a “married couple” and “unmarried couple” currently in section 48.
905.Paragraph 147(3) inserts a new subsection (2) in section 48 of the Tax Credits Act. It provides that two people of the same sex will be treated as living together as if they were civil partners if, but only if, they would be regarded as living together as husband and wife if they were instead two people of the opposite sex.