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Baroness Hollis of Heigham: These amendments introduce new clauses that aim to give tax credit recipients additional help by passporting recipients to additional benefits.
Amendment No. 26 seeks to ensure that WFTC and DPTC recipients are entitled to free prescriptions and other NHS help, in the same way that FC and DWA recipients were. Amendment No. 27 seeks to provide that recipients of WFTC should receive free school meals.
I should like to deal with the issues raised by Amendment No. 27 and the school meals point. WFTC is replacing family credit and taking on the major part of the current structure. Family credit has no provision to allow recipients to receive free school meals. There is a very good reason for that. Family credit itself replaced family income supplement, which did allow for free school meals. However, it was found that the take-up level was low, and 30 per cent. of those eligible failed to apply. It was decided that, instead, family credit would include a cash amount to compensate for that situation. In that way everyone obtained the equivalent value, and it was paid throughout the year, not just on school days. WFTC inherits this from family credit, and in that sense it has already provided what my noble friend is asking for. Given the much greater generosity of WFTC over family credit, the grounds for reinstating school meals as a passported benefit back in the old family income supplement days, I suggest, is even less appropriate.
I recognise that there is a particular problem when someone is coming off income support, having had the benefit of free school dinners, and is moving on to working credit and, in future, tax credit: the first four weeks are without pay. It is in that situation that the lack of free school dinners is a heavy expense. We recognise that problem. In the Budget the Chancellor stated that there should be income support roll-on for the first two weeks of the move into a tax credit. Given that benefits such as income support and JSA are paid up to two weeks in arrears, we believe that the two together will at least produce a bridge for that first month.
Other than that, given that it is not incorporated in family credit and that WFTC is more generous than family credit, I hope that my noble friend would agree that her amendment should be withdrawn.
Amendment No. 26 relates to NHS passporting. It seeks to ensure that NHS help to free prescriptions should continue as tax credits to replace the current benefits. The Tax Credits Bill works by making family credit and disability working allowance into working families' tax credit and the disabled person's tax credit by changing their names. This gives us the foundation on which to build. It also means that whenever there is a reference to FC or DWA in legislation, be it primary or secondary, from October of this year they will be read as references to WFTC and DPTC.
The importance of the new clause is that it attempts, but does not quite achieve, the goal of preventing changes beyond that renaming. I fear that it will not work because those changes are not a matter for the Inland Revenue, the Treasury and the Bill, but for other departments, especially the Department of Health, and their legislation. From what has been said, I wonder whether this is really what is wanted. Concerns have been expressed generally in relation to WFTC--the noble Lord, Lord Higgins, repeated them earlier today--about the total annual income that a family could receive and still qualify for a tax credit. These are concerns about targeting when we are referring to families who could, through two incomes, be earning over £30,000 or perhaps more per year.
We have said that we are committed to ensuring that WFTC and DPTC recipients who need it will continue to receive help provided by passported benefits such as those of the NHS low income scheme. As the current situation stands, tax credits go considerably further up the income distribution level. That is not by virtue of the tax credits. The childcare allowance extends it up the income levels.
We are still considering whether it is appropriate to passport all WFTC and DPTC claimants, some of whom, by virtue of their children and relatively high levels of childcare, could with relatively high earnings be receiving a tax credit on these additional benefits.
I am grateful for the non-partisan way in which not only my noble friend (from whom I would expect it) but also the Opposition Benches have dealt with the issue. They share the dilemma of the Government on this matter. It is a question of getting the balance right. The issues are not for a single Minister or department. They cut across Government. The noble Lord, Lord Swinfen, said that passported benefits are not just NHS prescription charges. They include home energy installation grants and assisted prison visits--I take the points he made--funeral and maternity grants, through to legal aid. At the last count, they affected seven or eight different government departments. We have to agree that what is decided is satisfactory and is perceived as fair on the same cross-government basis.
However, I can assure the Committee that we shall set out clearly what we propose in relation to passported benefits for recipients of tax credits before the Bill leaves Parliament. My noble friend is entitled to demand nothing less and that is what we shall do.
I wish that I could have given further clarification of the situation tonight. I cannot do so as the matter is still under negotiation. As soon as the position is clear across all the government departments in respect of all the benefits, I shall be happy to come back and clarify the position.
Lord Swinfen: I am grateful to the Minister for giving way. She said that she would set the matter out clearly before the Bill leaves Parliament. Is she able to do so before the Bill leaves this House? If the other place agrees any amendments that we subsequently make in this House the Bill will not come back here.
Baroness Hollis of Heigham: That is my hope. We are negotiating between seven or eight government departments and the timetable is not in my hands. The prime department is the Department of Health but other departments are involved. The DSS is already clear as to what will be proposed for its funeral and maternity grants. I hope to achieve the same degree of clarity from others. I hope I shall be able to inform the House as quickly as possible; I have no wish not to do so. However, the timing is not entirely in my hands so I shall do my best.
Lord Higgins: I am happy to continue the discussion on a non-partisan basis in order to assist the Minister. It would not be acceptable to us not to know what is to happen about this very important matter. We must have
an opportunity of debating it in this House. The only thing involved is ministerial time and, surely, even on a cross-departmental basis, having had many months of consideration already, they can make up their minds before Third Reading.I do not ask the Minister to respond, but in order to assist her, I wish to make clear that we must know where we are on a matter that is causing great concern. In doing so, I accept the difficulty of the argument, not least the problems of people on higher incomes and so forth.
Baroness Turner of Camden: I thank my noble friend for her response to Amendment No. 26. I appreciate that there are difficulties, particularly as regards recipients of higher incomes. I am grateful for her assurance that she will do her best to ensure that before the Bill leaves this House we shall know the results of the Government's reconsideration of these difficult issues. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins moved Amendment No. 28:
After Clause 5, insert the following new clause--
(" .--(1) In calculating the value of tax credit payable to a parent with care, maintenance payments received by him shall be disregarded.
(2) In calculating the value of tax credit payable to an absent parent, maintenance payments paid by him shall be disregarded from his income.
(3) In this section, "maintenance payments" means payments made under the directions of a court, or the child support agency, to maintain a child.")
The noble Lord said: We are coming into the finishing straight. Actually, I find that we have nearly completed a lap, because the maintenance amendment which we are now debating was related to the second group of amendments we discussed today, as the Minister pointed out. However, the points involved are not precisely the same.
There have been a number of representations suggesting that there is some confusion over the recently announced maintenance disregard for the working families' tax credit. Various outside bodies--for example, the CAB--are not sure what the Government intend, in particular as to what type of maintenance is to be disregarded. In February, the Paymaster General suggested that only child support would be disregarded and for the purposes of WFTC there would be a disregard of 100 per cent. for any maintenance paid as a result of the CSA intervention. However, the disregard of child maintenance arranged through the courts is not clear, nor is the situation with regard to voluntary child maintenance. In addition, there is a problem of whether spousal maintenance is to be disregarded and what
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