I would like to announce measures to ensure that people who have dependent children will continue to receive the benefit they are entitled to through child dependency increases, payable with incapacity benefit, state pension, widows benefit, bereavement benefit, and carer’s allowance.
The Child Benefit Act 2005 introduced a new definition of “qualifying young person” used to decide whether or not child benefit is payable for people aged 16 to 19. However, the Act did not make corresponding amendments to provisions for child dependency increases made under the Tax Credits Act 2002.
As a result, payments of child dependency increases, where the child is aged 16 years or over are not covered by primary legislation from 10 April 2006. This omission in primary legislation was an oversight and did not reflect Parliament’s intentions. Consequently these payments are considered irregular.
We estimate that 28,800 increases are affected in 2006-07 and 24,500 in 2007-08, with the level of overpayment amounting to approximately £15.1 million in 2006-07 and £12.6 million in 2007-08.
To enable payments of child dependency increases to continue as normal, we will reverse the unintentional effects of the Child Benefit Act 2005, by including a measure in the forthcoming Welfare Reform Bill. We expect this to be introduced in early 2009.
In the meantime I am issuing this statement to provide transparency and an assurance that no-one will lose any benefit entitlement or be asked to make any repayment as a result of this oversight in legislation.
This statement has been approved by the Chief Secretary to the Treasury.