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Tax Credits Act 2002

Schedule 3: Tax credits: consequential amendments

Attachment of earnings

165.Paragraph 1 provides that working tax credit and child tax credit are not to be considered as earnings for the purposes of the Attachment of Earnings Act 1971. Paragraph 3 has the same effect for the purposes of the Judgements Enforcement (Northern Ireland) Order 1981. Paragraph 8 has the same effect for the purposes of the Magistrates’ Courts (Northern Ireland) Order 1981 and paragraph 13 has the same effect for the purposes of the Debtors (Scotland) Act 1987.

Income and Corporation Taxes Act 1988

166.Paragraph 14 provides that working tax credit and child tax credit are not to be treated as income for the purposes of the Income Tax Acts.

Children Act 1989

167.Paragraphs 15 to 20 provide that where local authorities provide services for children in need, they will not be able to recover the cost of such services from persons in receipt of working tax credit or child tax credit other than the family element. Paragraph 16(3) enables regulations to be made by the Treasury providing that certain persons can be treated as being in receipt of working tax credit or any element of child tax credit other than the family element for the purposes of Part 3 of the Children Act 1989. This might cover, for example, persons who would receive tax credits but for the provision of free childcare to that person under Part 3 of that Act. Paragraphs 51 to 56 make equivalent amendments to the Children (Northern Ireland) Order 1995.

Social Security Contributions and Benefits Act 1992

168.Paragraph 25 ensures that the existing rules linking entitlement to incapacity benefit across an intervening period of receipt of disabled person’s tax credit will continue to have the same application for people entitled to the disability element of working tax credit who receive working tax credit or any element of the child tax credit other than the family element. Paragraph 30 has the same effect as paragraph 25 for the purposes of long-term incapacity benefit.

169.Paragraphs 31 and 32 make consequential amendments reflecting the fact that the State Earnings-Related Pension Scheme is to be replaced by the State Second Pension.

170.Paragraphs 36 to 44 make equivalent amendments to the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

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