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Tax Credits Act 2002

Measures in the Act

Child benefit and guardian’s allowance

35.The transfer of functions in relation to child benefit and guardian’s allowance is contained in Part 2 (sections 49 to 57 and Schedule 4). Broadly, both benefits will remain payable on the same basis as now.

36.Sections 49 and 50 set out those functions which will be transferred from the Secretary of State for Work and Pensions (and, in the case of Northern Ireland, from DSD) to the Treasury and the Inland Revenue. Functions to be transferred include the power to set the rates of benefit and conditions of entitlement, procedures for claims, payments and the recovery of overpayments, powers of enquiry and investigation, and the decision making and appeals process. Schedule 4, introduced by section 51, makes consequential amendments to other legislation in the light of the transfer of functions.

37.Section 52 provides for the Treasury or the Inland Revenue to take over all property, leases, service agreements, staff contracts and legal liabilities in respect of the responsibilities of DWP (and DSD in Northern Ireland) in relation to the functions transferred. Section 53 makes provision about the functions of the Inland Revenue in respect of child benefit and guardian’s allowance. Section 54 makes transitional provisions.

38.Sections 55 to 57 make minor changes to the entitlement rules for child benefit and guardian’s allowance to align them more closely with those for child tax credit. In particular, section 55 provides that these benefits may remain available for a certain period (to be set by regulations) after the death of a child. Section 56 removes the 182 day period during which child benefit is not available following the entry of a child or parent into the United Kingdom. Section 57 removes the existing bar to child benefit if a member of the family has tax-exempt income.

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