Welfare Reform Bill

Session 2010 - 12
Internet Publications
Other Bills before Parliament

Welfare Reform Bill

Welfare Reform Bill
Part 5 — Social security: general
87

36B
Section 36A: supplementary
(1)
Where—
(a)
the conviction of any person of any offence is taken in account
for the purposes of the application of section 36A in relation to
that person, and
5
(b)
that conviction is subsequently quashed,

all such payments and other adjustments shall be made as would be
necessary if no restriction had been imposed by or under section 36A
that could not have been imposed if the conviction had not taken place.
(2)
Where, after the agreement of any person (“P”) to pay a penalty under
10
the appropriate penalty provision is taken into account for the
purposes of the application of section 36A in relation to that person—
(a)
P’s agreement to pay the penalty is withdrawn under
subsection (5) of the appropriate penalty provision, or
(b)
it is decided on an appeal or in accordance with regulations
15
under the Social Security Act 1992 or the Social Security
(Northern Ireland) Order 1998 (S.I. 1998/1506 (N.I. 10)) that the
overpayment to which the agreement relates is not recoverable
or due,

all such payments and other adjustments shall be made as would be
20
necessary if no restriction had been imposed by or under section 36A
that could not have been imposed if P had not agreed to pay the
penalty.
(3)
Where, after the agreement (“the old agreement”) of any person (“P”) to
pay a penalty under the appropriate penalty provision is taken into
25
account for the purposes of the application of section 36A in relation to
P, the amount of any overpayment made to which the penalty relates is
revised on an appeal or in accordance with regulations under the Social
Security Act 1998 or the Social Security (Northern Ireland) Order
1998—
30
(a)
section 36A shall cease to apply by virtue of the old agreement,
and
(b)
subsection (4) shall apply.
(4)
Where this subsection applies—
(a)
if there is a new disqualifying event consisting of—
35
(i)
P’s agreement to pay a penalty under the appropriate
penalty regime in relation to the revised overpayment,
or
(ii)
P being cautioned in relation to the offence to which the
old agreement relates,
40

the disqualification period relating to the new disqualifying
event shall be reduced by the number of days in so much of the
disqualification period relating to the old agreement as had
expired when subsection 36A ceased to apply by virtue of the
old agreement, and
45
(b)
in any other case, all such payments and other adjustments shall
be made as would be necessary if no restriction had been
imposed by or under section 36A that could not have been
imposed if P had not agreed to pay the penalty.
(5)
For the purposes of section 36A—
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(a)
the date of a person’s conviction in any proceedings of a benefit
offence shall be taken to be the date on which the person was
found guilty of that offence in those proceedings (whenever the
person was sentenced) or in the case mentioned in paragraph
(b)(ii) the date of the order for absolute discharge, and
5
(b)
references to a conviction include references to—
(i)
a conviction in relation to which the court makes an
order for absolute or conditional discharge,
(ii)
an order for absolute discharge made by a court of
summary jurisdiction in Scotland under section 246(3)
10
of the Criminal Procedure (Scotland) Act 1995 without
proceeding to a conviction, and
(iii)
a conviction in Northern Ireland.
(6)
In this section “the appropriate penalty provision” has the meaning
given by section 36A(2)(a).
15
36C
Loss of working tax credit for repeated benefit fraud
(1)
If—
(a)
a person (“the offender”) is convicted of one or more benefit
offences in a set of proceedings (“the current set of
proceedings”),
20
(b)
within the period of five years ending on the date on which the
benefit offence was, or any of them were, committed, one or
more disqualifying events occurred in relation to the offender
(the event, or the most recent of them, being referred to in this
section as “the earlier disqualifying event”),
25
(c)
the current set of proceedings has not been taken into account
for the purposes of any previous application of this section in
relation to the offender,
(d)
the earlier disqualifying event has not been taken into account
as an earlier disqualifying event for the purposes of any
30
previous application of this section in relation to the offender,
and
(e)
the offender is a person who would, apart from this section, be
entitled (whether pursuant to a single or joint claim) to working
tax credit at any time within the disqualification period,
35

then, despite that entitlement, the restriction in subsection (3) shall
apply in relation to the payment of that benefit in the offender’s case.
(2)
The restriction in subsection (3) does not apply if the benefit offence
referred to in subsection (1)(a), or any of them, is a relevant offence.
(3)
Working tax credit shall not be payable for any period comprised in the
40
disqualification period—
(a)
in the case of a single claim, to the offender, or
(b)
in the case of a joint claim, to the offender or the other member
of the couple.
(4)
Regulations may provide in relation to cases to which subsection (3)(b)
45
would otherwise apply that working tax credit shall be payable, for any
period comprised in the disqualification period, as if the amount
payable were reduced in such manner as may be prescribed.

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(5)
For the purposes of this section the disqualification period, in an
offender’s case, means the relevant period beginning with a prescribed
date falling after the date of the conviction in the current set of
proceedings.
(6)
For the purposes of subsection (5) the relevant period is—
5
(a)
in a case where, within the period of five years ending on the
date on which the earlier disqualifying event occurred, a
previous disqualifying event occurred in relation to the
offender, the period of three years;
(b)
in any other case, 26 weeks.
10
(7)
In this section and section 36D—
“appropriate penalty provision” has the meaning given in section
36A(2)(a);
“benefit offence” means any of the following offences committed
on or after the day specified by order made by the Treasury—
15
(a)
an offence in connection with a claim for a disqualifying
benefit;
(b)
an offence in connection with the receipt or payment of
any amount by way of such a benefit;
(c)
an offence committed for the purpose of facilitating the
20
commission (whether or not by the same person) of a
benefit offence;
(d)
an offence consisting in an attempt or conspiracy to
commit a benefit offence;
“disqualifying benefit” has the meaning given in section 6A(1) of
25
the Social Security Fraud Act 2001;
“disqualifying event” has the meaning given in section 36A(10);
“relevant offence” has the meaning given in section 6B of the Social
Security Fraud Act 2001.
(8)
Where a person is convicted of more than one benefit offence in the
30
same set of proceedings, there is to be only one disqualifying event in
respect of that set of proceedings for the purposes of this section and—
(a)
subsection (1)(b) is satisfied if any of the convictions take place
in the five year period there;
(b)
the event is taken into account for the purposes of subsection
35
(1)(d) if any of the convictions have been taken into account as
mentioned there;
(c)
in the case of the earlier disqualifying event mentioned in
subsection (6)(a), the reference there to the date on which the
earlier disqualifying event occurred is a reference to the date on
40
which any of the convictions take place;
(d)
in the case of the previous disqualifying event mentioned in
subsection (6)(a), that provision is satisfied if any of the
convictions take place in the five year period mentioned there.
(9)
The Treasury may by order amend subsection (6) to substitute different
45
periods for those for the time being specified there.
(10)
An order under subsection (9) may provide for different periods to
apply according to the type of earlier disqualifying event or events
occurring in any case.

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(11)
This section has effect subject to section 36D.
36D
Section 36C: supplementary
(1)
Where—
(a)
the conviction of any person of any offence is taken into account
for the purposes of the application of section 36C in relation to
5
that person, and
(b)
that conviction is subsequently quashed,

all such payments and other adjustments shall be made as would be
necessary if no restriction had been imposed by or under section 36C
that could not have been imposed if the conviction had not taken place.
10
(2)
Subsection (3) applies where, after the agreement of any person (“P”) to
pay a penalty under the appropriate penalty provision is taken into
account for the purposes of the application of section 36C in relation to
that person—
(a)
P’s agreement to pay the penalty is withdrawn under
15
subsection (5) of the appropriate penalty provision,
(b)
it is decided on an appeal or in accordance with regulations
under the Social Security Act 1998 or the Social Security
(Northern Ireland) Order 1998 (S.I. 1998/1506 (N.I. 10)) that any
overpayment made to which the agreement relates is not
20
recoverable or due, or
(c)
the amount of any over payment to which the penalty relates is
revised on an appeal or in accordance with regulations under
the Social Security Act 1998 or the Social Security (Northern
Ireland) Order 1998 and there is no new agreement by P to pay
25
a penalty under the appropriate penalty provision in relation to
the revised overpayment.
(3)
In those circumstances, all such payments and other adjustments shall
be made as would be necessary if no restriction had been imposed by
or under section 36C that could not have been imposed if P had not
30
agreed to pay the penalty.
(4)
For the purposes of section 36C—
(a)
the date of a person’s conviction in any proceedings of a benefit
offence shall be taken to be the date on which the person was
found guilty of that offence in those proceedings (whenever the
35
person was sentenced) or in the case mentioned in paragraph
(b)(ii) the date of the order for absolute discharge, and
(b)
references to a conviction include references to—
(i)
a conviction in relation to which the court makes an
order for absolute or conditional discharge,
40
(ii)
an order for absolute discharge made by a court of
summary jurisdiction in Scotland under section 246(3)
of the Criminal Procedure (Scotland) Act 1995 without
proceeding to a conviction, and
(iii)
a conviction in Northern Ireland.
45
(5)
In section 36C references to any previous application of that section—
(a)
include references to any previous application of a provision
having an effect in Northern Ireland corresponding to provision
made by that section, but

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(b)
do not include references to any previous application of that
section the effect of which was to impose a restriction for a
period comprised in the same disqualification period.”
(3)
In section 38 (appeals), in subsection (1)—
(a)
the “and” immediately following paragraph (c) is repealed;
5
(b)
after that paragraph there is inserted—
“(ca)
a decision under section 36A or 36C that working tax
credit is not payable (or is not payable for a particular
period), and”.
(4)
In section 66 (parliamentary etc control of instruments)—
10
(a)
in subsection (1)—
(i)
after “no” there is inserted “order or”;
(ii)
for “them” there is substituted “the order or regulations”;
(b)
in subsection (2) before paragraph (a) there is inserted—
“(za)
an order made by the Treasury under section 36A(8) or
15
36C(9),
(zb)
regulations made under section 36A(5) or 36C(4),”;
(c)
in subsection (3)(a) at the beginning there is inserted “an order or”.
(5)
In section 67 (interpretation), at the appropriate place there is inserted—
““cautioned”, in relation to any person and any offence, means
20
cautioned after the person concerned has admitted the offence;
and “caution” is to be interpreted accordingly;”.
119
Cautions
(1)
In section 6B of the Social Security Fraud Act 2001 (loss of benefit in case of
conviction, penalty or caution for benefit offence)—
25
(a)
in the heading, for “penalty or caution” there is substituted “or
penalty”;
(b)
in subsection (1), after paragraph (a) there is inserted “or”;
(c)
subsection (1)(c) (cautions) is repealed;
(d)
in subsection (13), in the definition of “disqualifying event”, after
30
“(1)(a)” there is inserted “or”.
(2)
In section 36A of the Tax Credits Act 2002 (loss of tax working tax credit in case
of conviction, penalty or caution for benefit offence) subsection (1)(c) (cautions)
is repealed.
Administration of tax credits
35
120
Tax credit fraud: investigation
In section 109A of the Social Security Administration Act 1992 (authorisations
for investigators), at the end there is inserted—
“(9)
This section and sections 109B to 109C below apply as if—
(a)
the Tax Credits Act 2002 were relevant social security
40
legislation, and

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(b)
accordingly, child tax credit and working tax credit were
relevant social security benefits for the purposes of the
definition of “benefit offence”.”
121
Information-sharing for prevention etc of tax credit fraud
(1)
Section 122B of the Social Security Administration Act 1992 (supply of
5
government information for fraud prevention etc) is amended as follows.
(2)
In subsection (2)(a), after “social security” there is inserted “or tax credits”.
(3)
In subsection (3)—
(a)
in paragraph (b), after “1995” there is inserted “, the Tax Credits Act
2002”,
10
(b)
in that paragraph, the final “or” is repealed, and
(c)
after paragraph (c) there is inserted “or
(d)
it is supplied under section 125 of the Welfare Reform
Act 2011.”
122
Tax credit fraud: prosecution and penalties
15
In section 35 of the Tax Credits Act 2002 (offence of fraud), for subsection (2)
there is substituted—
“(2)
Where a person is alleged to have committed an offence under this
section in relation to payments of a tax credit not exceeding £20,000, the
offence is triable summarily only.
20
(3)
A person who commits an offence under this section is liable on
summary conviction pursuant to subsection (2) to imprisonment for a
term not exceeding the applicable term, or a fine not exceeding level 5
on the standard scale, or both.
(4)
In subsection (3) the applicable term is—
25
(a)
for conviction in England and Wales, 51 weeks;
(b)
for conviction in Scotland or Northern Ireland, 6 months.
(5)
Where a person is alleged to have committed an offence under this
section in any other case, the offence is triable either on indictment or
summarily.
30
(6)
A person who commits an offence under this section is liable—
(a)
on summary conviction pursuant to subsection (5), to
imprisonment for a term not exceeding the applicable term, or
a fine not exceeding the statutory maximum, or both;
(b)
on conviction on indictment pursuant to subsection (5) to
35
imprisonment for a term not exceeding 7 years, or a fine, or
both.
(7)
In subsection (6)(a) the applicable term is—
(a)
for conviction in England and Wales or Scotland, 12 months;
(b)
for conviction in Northern Ireland, 6 months.
40
(8)
In relation to an offence under this section committed in England and
Wales before the commencement of section 281(5) of the Criminal

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Justice Act 2003, the reference in subsection (4)(a) to 51 weeks is to be
read as a reference to 6 months.
(9)
In relation to an offence under this section committed in England and
Wales before the commencement of section 154(1) of the Criminal
Justice Act 2003, the reference in subsection (7)(a) to 12 months is to be
5
read as a reference to 6 months.
(10)
In England and Wales—
(a)
subsection (1) of section 116 of the Social Security
Administration Act 1992 (legal proceedings) applies in relation
to proceedings for an offence under this section;
10
(b)
subsections (2)(a) and (3)(a) of that section apply in relation to
proceedings for an offence under this section which is triable
summarily only pursuant to subsection (2) above.
(11)
In Scotland, subsection (7)(a) and (b) of section 116 of the Social Security
Administration Act 1992 (legal proceedings) apply in relation to
15
proceedings for an offence under this section which is triable
summarily only pursuant to subsection (2) above.
(12)
In Northern Ireland—
(a)
subsection (1) of section 110 of the Social Security
Administration (Northern Ireland) Act 1992 (legal proceedings)
20
applies in relation to proceedings for an offence under this
section;
(b)
subsections (2)(a) and (3)(a) of that section apply in relation to
proceedings for an offence under this section which is triable
summarily only pursuant to subsection (2) above.”
25
123
Unauthorised disclosure of information relating to tax credit offences
In Schedule 4 to the Social Security Administration Act 1992 (persons
employed in social security administration or adjudication), in paragraph 1 of
Part 2, after “security,” there is inserted “to the investigation or prosecution of
offences relating to tax credits,”.
30
124
Tax credits: transfer of functions etc
(1)
Her Majesty may by Order in Council—
(a)
transfer to the Secretary of State any tax credit function of the Treasury
or the Commissioners;
(b)
direct that any tax credit function of the Treasury or the Commissioners
35
is to be exercisable concurrently with the Secretary of State or is to cease
to be so exercisable.
(2)
Provision within subsection (1) may be limited so as to apply only in relation
to cases within a specified description.
(3)
Her Majesty may by Order in Council, as Her Majesty considers appropriate—
40
(a)
make provision in connection with a transfer or direction under
subsection (1);
(b)
make other provision within one or more of the following sub-
paragraphs—