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Lord Saatchi: Will the Minister say what is the take-up assumption behind the £4.6 billion cost of tax credits in the Red Book?
Baroness Hollis of Heigham: I am sorry, I thought I had given the noble Lord that just now. We were expecting to see 85 per cent take-up of tax credit. The figure is not higher than that because there are 300,000 people who live in childless families—either single adults or couples—who currently are not eligible for any financial support. We do not know how many of those we shall be able to reach.
Lord Saatchi: Were there to be a shortfall on the 85 per cent figure, can the Minister say whether there is a mechanism by which those who are eligible and have the right to those tax credits, but who have not taken them up and therefore are not part of the 85 per cent, could receive them?
Baroness Hollis of Heigham: We shall come later to an amendment about back-dating—the noble Lord will understand the provisions of back-dating the Bill—and we can discuss it then. At the moment our intention is that back-dating applies for about three months for those who have failed to claim. For those who have over-claimed, it would go back to the point at which the claim was started.
Lord Saatchi: The reason for my disappointment with the Minister's response is that I believe that the Prime Minister likes to say that we all have rights and responsibilities. As my learned friend said, it has been determined that the citizens, the people, have the right to these tax credits. The responsibility falls on the Government to make sure that they receive them. I did not have the impression from the Minister's remarks that she really takes the point that the claim forms are
a deterrent to 100 per cent take-up. Nevertheless, I am happy to leave the point there. I beg leave to withdraw the amendment.Amendment, by leave, withdrawn.
The Deputy Chairman (Baroness Nicol): I must inform the Committee that if Amendment No. 34 is agreed to, I shall be unable to call Amendment No. 35.
The Earl of Northesk moved Amendment No. 34:
- Page 3, line 24, leave out paragraph (f).
The noble Earl said: In moving Amendment No. 34 I shall speak also to Amendment No. 35. These are probing amendments. Amendment No. 34 leaves out paragraph (f) of Clause 4(1). I simply ask whether the Minister could, for the record, give examples of situations in which the Government believe that one person may act for another in making a claim for a tax credit.
Amendment No. 35 seeks to ensure that the Revenue satisfies itself as to the identity of a person making a claim on behalf of another, and that that person is acting genuinely in that capacity. In other words, this is a belt and braces approach to limiting opportunities for fraudulent claims. I beg to move.
Earl Russell: Believe it or not, I wish to speak to Amendment No. 100 in this grouping. It is an amendment in my own name. It is the first time this has happened in the course of the Bill. It also deals with the question of joint action, but this one comes from much further on, page 17, dealing with the giving of notices by the board. The cause I want to take up states that,
- "Regulations may—
- provide that, in prescribed circumstances, one person may act for another".
What interests me is the extent of this part of the Bill. As drafted, it is of pretty unlimited potential application. The amendment I have tabled—I assure Members of the Committee that I would have no intention of pressing it, even if we were not in Grand Committee—is that,
- "when the claimant is fit and of sound mind, no such circumstance may be prescribed without the consent of the claimant".
The question is, of course, how far anybody has the right to refuse to allow another person to act for them. I can think of circumstances dealing with couples who have separated perhaps during the tax year and perhaps under highly contentious circumstances, or even under potentially dangerous circumstances, where they would not in the least wish to have anyone else acting for them. Because of the use of the word "may" about communicating information, I need not ask for any further amendment of the Bill.
I merely want to ask the Minister, first, what is actually intended with this power. Secondly, is there any way in which it could be drafted it to make the vires a little less unlimited in their extent, to restrict their intention, which I am sure is a good one, to something a little closer to the words of the Bill so that it does not
authorise a whole mass of actions which it does not really want to authorise? I await the Minister's reply with interest and with a certain degree of optimism.
Baroness Hollis of Heigham: The noble Earl, Lord Northesk, asked about the nature and scale of the issue. It may be helpful if I can give him some information. Currently, working families' tax credit and disabled person's tax credit claims may be made on behalf of a person unable to act by themselves by an "appointee". An appointee is someone appointed as a receiver by the Court of Protection or as a guardian, tutor or curator by another court of law, or someone who has been specifically appointed by a Secretary of State or Board of Inland Revenue to act on behalf of that person for the purposes of claims for benefits or tax credits. Regulation 33 of the Social Security (Claims and Payments) Regulations 1987 sets this out in detail. The provision is of particular benefit to those with severe disabilities or learning difficulties who may not be able physically to complete a claim form, but who may be eligible.
At this point I may be able to give the noble Earl some further information. My understanding is that around 1,000 DPTCs—disability awards—are currently made in cases where an appointee acts on the claimant's behalf. That is quite a small proportion, only about 3 per cent of the total, with three-quarters of those being appointee cases made by the Secretary of State or Board of the Inland Revenue. The rest are court order appointments. Around 20 per cent, 200 of those cases, are spouses appointed on their partners' behalf, but those cases are all investigations considered to be cases where the claimant is genuinely unable to act.
I have checked and none of the staff in our unit can recall a case where a spouse was appointed when the other spouse could have acted on their own behalf. We have no evidence at all, therefore, to suggest that the issue of appointment and appointees has at any stage been abused. The numbers are so small and the procedure so rigorous that that has not occurred.
If the noble Earl has any evidence to the contrary, then he should let me know. However, I have pursued the matter in some detail because it seemed very important. I was concerned about undue pressure, given that these are high value benefits. Given the procedure, we have no evidence that this has occurred under the existing benefit claims, except entirely to the advantage of the claimant. I hope he will agree that we do not need to elaborate on the procedures we already have, because they seem to be working. The noble Earl, Lord Russell, asks us to introduce a safeguard into the provisions. In this case it is where an appointee is responding to an end-of-year notice under Clause 17. I stress that no appointee would be appointed by the Board of Inland Revenue if it is not in the best interests of the claimant to do so.
Amendment No. 100 would not allow appointees to act on a person's behalf in response to a Clause 17 notice if the person was fit and of sound mind, unless the person consented. I do not think that provision is necessary, because it is already the case. I shall check
with my advisers and see whether, either through wording on the face of the Bill, or through regulations, we need to allay the noble Earl's fears by greater clarity of wording.5.30 p.m.
Earl Russell: I am most grateful for that reply. Greater clarity of wording would give me everything for which I can legitimately ask.
The Earl of Northesk: I am entirely satisfied with the Minister's response and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 35 and 36 not moved.]
Earl Russell moved Amendment No. 37:
- Page 3, line 31, at end insert—
The noble Earl said: It is addictive, it has happened a second time: I am actually moving another amendment. This deals with the time in which claims for tax credits can be made. They are to be made in a prescribed manner and within a prescribed time.
Some of your Lordships may remember a Bill that was drafted by the Law Commission and raised at Question Time in the Chamber and discussed in various other ways about a year or so ago. It was a Bill to repeal the clause in the Statute of Gloucester of 1278, which said that a case cannot be counted as murder if death should happen more than a year and a day after the original injury was inflicted. Life support machines have made that out of date.
That serves to remind us that even the most carefully and generously thought-out time limit may occasionally turn out to be irrelevant to the facts of the case. There may be cases in which people do not make a claim because they are on a life support machine and are not capable of reasoning, hearing or working out anything for themselves. Mental illness can also create such a condition. It is unfair that such serious disadvantages should also prevent those who suffer from them putting in a claim for a tax credit to which they might be entitled.
I put down an amendment along roughly these lines to the Child Support Act 1991. I did not move it because it would have come up at 2 a.m. I found to my intense surprise that for the next stage of the Bill the amendment was down in the name of the noble and learned Lord, the Lord Chancellor. I was not quite as fortunate in 1995. On the other hand, the principle was accepted in the regulations that we discussed last Tuesday, which were, happily, passed. As a general principle it has been accepted twice by government. Doing the hat-trick is rather nice. I hope it might happen this time. I beg to move.
"( ) The Secretary of State shall have discretion to extend such times as are prescribed under subsection (1)(a) owing to illness or other circumstances of the claimant not under his control, or to delays by other parties over whom the claimant has no control."
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