Missing the disability element of child tax credit – frequently asked questions

What is the disability element of child tax credit?

The disability element is an extra amount that is added into your child tax credit award. It is worth an extra £65.94 per week for each child in your family who qualifies.

Who qualifies for the disability element?

You should get a disabled child element included in your child tax credit award for each child who is either on Disability Living Allowance (DLA) or on Personal Independence Payment (PIP) or who is registered blind.

If a child gets the highest rate of the DLA care component (or the daily living component of PIP at the enhanced rate) you should also get a further £26.67 per week added to your tax credit award – a payment known as the severe disability element of child tax credit.

Why have the Tax Credits office written to me about a ‘child disability adjustment’?

In early 2016, the DLA Unit and the Tax Credit Office carried out a data matching exercise and discovered that because of ‘a gap in the data feed’, around 28,000 families with a child on DLA were missing out on a disability element in their child tax credits. The Tax Credits Office wrote to each of those families and paid them a lump sum for arrears for the period April 2016 onwards.

It has now come to light that some families who lost out were not identified in this original exercise. As a result the Tax Credit Office will be contacting another 5000-10,000 families who lost out, to pay them arrears.

What caused this gap in the data feed?

The DLA claim form includes a question allowing you to say if you are claiming child tax credit. If you tick yes to this question and your child is subsequently awarded DLA, the Department for Work and Pensions (DWP) are supposed to notify the Tax Credits Office (TCO) that your child has been awarded DLA. This should ensure that the extra disability element is added to your child tax credit award even if you don’t tell tax credits about the DLA award yourself.

However, between 2011 and 2014, this question was removed from the DLA claim form. It is our understanding that the DWP thought they had alternative systems in place to ensure that TCO would continue to be notified of all child DLA awards. Unfortunately this was a mistake, and the number of cases where TCO were told about a DLA award dropped dramatically. In 2014 this question was put back into the DLA form.

I have missed out on the disability element of child tax credit for several years. Will the Tax Credits Office pay me arrears for the period prior to April 2016?

TCO don’t intend to pay arrears for any period before April 2016. This is because the regulations say that the disability element should only be backdated to the date that a DLA award started where TCO are notified within one month of the DLA decision. Otherwise, backdating is normally limited to only one month.

TCO say that the main responsibility for making sure they are notified of your child’s DLA lies with you. If you did not tell them that your child was awarded DLA they believe they are under no legal responsibility to pay you any further arrears. They take this view regardless of the fact that a system of automatic notification was supposed to be in place.

Can I challenge their policy of not paying arrears for earlier tax years?

Yes, it may be possible to try and challenge this. We have produced a template letter that you can use to argue that HMRC should revise your tax credit awards for earlier years and to pay you further arrears.

Please complete the template letter using the instructions in red within the letter as guidance. Once completed, you should then delete those sections in red before printing out the letter, signing it and sending it to the Tax Credit Office.

Download the template letter now.

What should I do if I send off a copy of the letter but their response is to still refuse to pay any arrears for earlier years?

It is likely that TCO will refuse your request for further arrears at the mandatory reconsideration stage. If this happens, or if they pay arrears for 2015/16 but not for earlier years, you will have the option of lodging an appeal which would be heard by an independent Tribunal.

You will have one month from the date of the new decision refusing to backdate within which to lodge an appeal. We intend to produce a further template letter to be used in requesting an appeal. Contact our freephone helpline for further information.

Ultimately there is no guarantee that pursuing a reconsideration and appeal will lead to the award of more arrears, but you have nothing to lose in trying.

Your template letter only asks for arrears for the period 2011-2016. Why is that?

The tax credit regulations only allow TCO to review and correct an earlier decision on the basis of official error if that decision was made within the last five years. If you think that you have missed out on the disability element in tax years prior to 2011/12, then call our freephone helpline for further advice.

I have missed out on the disability element for more than one child. Can I still use the template letter?

Contact our freephone helpline to get help in adapting the letter for more than one child.

I haven’t received a letter from TCO but I think I may have missed out on the disability element for my child. What should I do?

Contact our freephone helpline for further advice. If you have not already done so, make sure that you also call the Tax Credits Office to let them know that your child gets DLA.

Is there anything else I can do?

Contact a Family believes that families facing exceptional pressures in caring for a disabled child shouldn’t be expected to know that they need to tell TCO when their child is awarded DLA. The fact that around 28,000 families have lost out suggests that official information on this requirement is either unclear or obscured by the copious amounts of information sent out in relation to their tax credit and DLA claims.

Families will assume that systems are in place to ensure that information about a DLA award is shared automatically, and the fact that these systems appear not to work efficiently or consistently arguably amounts to maladministration.

With this in mind you may choose to ask your MP to raise this issue with the DWP and HMRC. Your MP could also ask the Parliamentary and Health Service Ombudsman to look into this issue. Contact a Family has also called on the government to set up a compensation fund for families who have missed out on these extra payments as a result of failures in the system of automatic notification.

Further advice

If you are a parent with a disabled child and would like further advice about this issue, please phone our freephone helpline.