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Child Trust Funds Act 2004

Section 2: Eligible children

13.Subsection (1) defines a child eligible for a CTF account as a child born after 31 August 2002 who is the subject of a child benefit award. This means that it will be essential to claim child benefit for a child if that child is to qualify for a CTF account. There is one exception to this rule which is covered in subsection (1)(b). Child benefit cannot be claimed for children who are looked after by a local authority. The effect of subsection (1)(b) (together with subsection (2)) is to bring these children into eligibility for the CTF although child benefit cannot be claimed for them.

14.Subsection (3) ensures that children who live in the UK, but in respect of whom child benefit is not payable by the UK because of EU legislation or an international agreement, are eligible for child trust funds. Under European Union Regulation 1408/71 which governs the co-ordination of social security for migrant workers within the EU, child benefit is normally payable by the country in which the parent works. Given the geographic position of the UK, the most common situation is where a family lives in Northern Ireland and the only working parent works in the Republic of Ireland. In these circumstances child benefit is payable by the Republic of Ireland under Regulation 1408/71. This subsection ensures that otherwise eligible children in these circumstances will be entitled to a CTF account.

15.Subsection (4) provides that where a person is only entitled to child benefit because of EU legislation or an international agreement the child will not be entitled to a CTF account. Under European Union Regulation 1408/71 UK child benefit can be payable in respect of children who are not living in the UK, for instance children of European Union nationals working in the UK where the child still lives in the country of origin. Children in these circumstances will not be eligible for a CTF account. If such a child moves to live in the UK, he or she will be eligible from the time of that move subject to child benefit continuing to be awarded. This rule will not affect the children of MoD families and other crown servants as they are entitled to child benefit when based overseas by virtue of regulation 30 of the Child Benefit (General) Regulations 2003 (S.I. 2003 No. 493).

16.Subsection (5) provides that a child who does not have a right of abode in the United Kingdom, is not entitled to reside in the United Kingdom under European legislation and is not settled in the United Kingdom (within the meaning of section 33(2A) of the Immigration Act 1971), is not an eligible child. A child is settled in the United Kingdom if he is ordinarily resident here and under immigration law is not subject to any restriction on the period for which he may remain.

17.Subsection (6) provides that entitlement to child benefit under subsection (1)(a) is established once a decision has been taken to award child benefit under Chapter 2 of Part 1 of the Social Security Act 1998 (or Northern Ireland equivalent). This means that the decision to award child benefit is the point at which a child becomes eligible for a CTF account.

18.Subsection (7) enables regulations to be made under which an earlier date would be substituted for 31 August 2002 in subsection (1). Such regulations would bring older children into eligibility for the CTF.

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