Main provisions

1 Certain benefits to be known as tax credits

(1) Family credit and disability working allowance shall be known, respectively, as working families' tax credit and disabled person’s tax credit.

(2) Schedule 1 to this Act (which makes provision consequential on subsection (1) above) shall have effect.

2 Transfer of functions relating to tax credits

(1) So far as they relate to working families' tax credit or disabled person’s tax credit—

(a) the functions of the Secretary of State or the Department under the provisions mentioned in Part I of Schedule 2 to this Act shall be functions of the Treasury;

(b) the functions of the Secretary of State or the Department under the provisions mentioned in Part II of that Schedule shall be functions of an officer of the Board; and

(c) subject to subsection (2) below, the functions of the Secretary of State or the Department under the provisions mentioned in Part III of that Schedule shall be functions of the Board.

(2) So far as any functions referred to in subsection (1)(c) above are exercisable in relation to payment periods beginning before the commencement of this section, those functions—

(a) shall not be functions of the Board; but

(b) may be discharged by the Board on behalf of the Secretary of State or the Department.

(3) Part IV of Schedule 2 to this Act (which modifies certain enactments in their application to tax credit) shall have effect.

(4) Part V of that Schedule (which makes provision consequential on subsection (1) above) shall have effect.

3 Transfer of associated property, rights and liabilities etc

(1) Any property, rights and liabilities to which the Secretary of State or the Department is entitled or subject immediately before the commencement of this section in connection with functions transferred to the Treasury by section 2(1) above shall be transferred to the Treasury.

(2) Any property, rights and liabilities to which the Secretary of State or the Department is entitled or subject immediately before the commencement of this section in connection with functions transferred to the Board or an officer of the Board by section 2(1) above shall be transferred to the Board.

(3) The property, rights and liabilities transferred by subsections (1) and (2) above do not include any right or liability in respect of which proceedings are commenced before the commencement of this section.

(4) Her Majesty may by Order in Council make such provision for the transfer to Her Majesty’s Home Civil Service of persons employed in the Northern Ireland Civil Service as appears to Her Majesty to be expedient.

(5) A statutory instrument containing an Order in Council under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

4 Special provision for certain contracts

(1) This section applies to—

(a) any contract for the supply of goods or services to the Secretary of State or the Department which relates partly to functions transferred to the Board by section 2(1) above (“transferred functions”) and partly to functions retained by the Secretary of State or the Department (“retained functions”); and

(b) any contract for the supply of goods or services to the Secretary of State or the Department which relates only to transferred functions or only to retained functions, but whose terms are wholly or partly determined in accordance with a contract falling within paragraph (a) above.

(2) Section 3 above shall not apply in relation to any contract to which this section applies.

(3) In any contract to which this section applies any term restricting the provision of goods or services under the contract to the Secretary of State or the Department shall be treated as referring also to the Board, in connection with transferred functions.

(4) The reference to the Secretary of State in subsection (3) above includes a reference to the Department of Social Security.

Administration and enforcement

5 General functions of Board

(1) Working families' tax credit and disabled person’s tax credit shall be under the care and management of the Board.

(2) Section 10 of the [1866 c. 39.] Exchequer and Audit Departments Act 1866 (gross revenues to be paid to Exchequer) shall be construed as allowing the Board to deduct payments for or in respect of tax credit before causing the gross revenues of their department to be paid to the accounts mentioned in that section.

(3) For the purposes of the [1890 c. 21.] Inland Revenue Regulation Act 1890, everything that relates to tax credit shall be taken to relate to inland revenue; and the expressions “in relation to inland revenue”, “Collector of Inland Revenue” and “Officer of Inland Revenue” shall be construed accordingly.

(4) The reference in section 4(1) of that Act (appointment of collectors, officers and other persons) to collecting, receiving, managing and accounting for inland revenue shall be taken to include a reference to paying and managing tax credit.

(5) The duties of the Board under section 13 of that Act (Board to keep accounts) shall include a duty to set forth in the accounts mentioned in that section—

(a) the amounts of the several payments made by them of or in respect of tax credit;

(b) the amounts of the expenses of paying and managing tax credit; and

(c) the amounts received by them in respect of tax credit,

distinguishing in each case between amounts relating to working families' tax credit and amounts relating to disabled person’s tax credit.

(6) In any declaration for the purposes of section 6 of the [1970 c. 9.] Taxes Management Act 1970 (declarations on taking office), whether made before or after the commencement of this section, the reference to an offence relating to inland revenue shall be taken to include a reference to an offence relating to tax credit.

(7) Section 163(2) of the [1922 c. 5.] Social Security Administration Act 1992 (sums to be paid out of money provided by Parliament) shall have effect subject to subsection (2) above.

6 Payment of tax credit by employers etc

(1) On the making to any person (“the employee”) of any payment of, or on account of, any income assessable to income tax under Schedule E, any tax credit to which he is entitled shall, subject to and in accordance with regulations made by the Board under this section, be paid by the person making the payment (“the employer”).

(2) The Board shall make regulations with respect to the payment of tax credit by employers, and those regulations may, in particular, include provision—

(a) for requiring employers to make payments of tax credit by reference to notifications of entitlement furnished to them by the Board;

(b) for the production of wages sheets and other documents and records to officers of the Board for the purpose of enabling them to satisfy themselves that tax credit has been and is being paid, in accordance with the regulations, to employees who are entitled to it;

(c) for requiring employers to provide information to employees (in their itemised pay statements or otherwise);

(d) for the funding by the Board of tax credit paid or to be paid by employers (whether by way of set off against income tax or national insurance contributions for which they are accountable to the Board or otherwise);

(e) for the recovery by the Board of any sums overpaid to employers under paragraph (d) above;

(f) for the payment of interest on sums due from or to the Board, and for determining the date from which interest is to be calculated; and

(g) for appeals with respect to matters arising under the regulations which would otherwise not be the subject of an appeal.

(3) Regulations under this section—

(a) may make different provision for different cases or circumstances; and

(b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(4) This section shall come into force on 6th April 2000.

7 Rights of employees not to suffer unfair dismissal or other detriment

Schedule 3 to this Act (rights of employees not to suffer unfair dismissal or other detriment) shall have effect.

8 Powers to obtain information

(1) Section 20 of the Taxes Management Act 1970 [1970 c. 9.] (power to call for documents etc.), and section 20B of that Act (restrictions on powers) so far as relating to section 20, shall apply in relation to an employer’s compliance with regulations under section 6 above as they apply in relation to a person’s tax liability or its amount.

(2) Those sections as they so apply shall have effect as if—

(a) any reference to the taxpayer, a taxpayer or a class of taxpayers were a reference to the employer, an employer or a class of employers;

(b) any reference to any provision of the Taxes Acts were a reference to regulations under section 6 above;

(c) any reference to the proper assessment or collection of tax were a reference to the proper award and payment of tax credit;

(d) the reference in section 20(8) to the taxpayer with whose liability the inspector or the Board is concerned were a reference to the employer with whose compliance with regulations under section 6 above the inspector or the Board is concerned;

(e) the reference in section 20B(2) to an appeal relating to tax were a reference to an appeal relating to compliance with regulations under section 6 above; and

(f) the reference in section 20B(6) to reasonable ground for believing that tax has, or may have been, lost to the Crown owing to the fraud of the taxpayer were a reference to reasonable ground for believing that tax credit has, or may have been, incorrectly paid owing to the fraud of the employer.

9 Penalties for fraud etc. and failures to comply

(1) Where a person fraudulently or negligently makes any incorrect statement or declaration in connection with a claim for tax credit, he shall be liable to a penalty not exceeding the amount of the difference specified in subsection (2) below.

(2) The difference is that between—

(a) the amount of tax credit to which the claimant is or was entitled in the payment period to which the claim relates; and

(b) the amount of tax credit to which he would have been so entitled if the statement or declaration had been correct.

(3) Where a person—

(a) fails to furnish any information or evidence in accordance with regulations under section 5(1)(h) or (hh) of the Administration Act so far as relating to tax credit;

(b) fails to produce any document or record, or to provide any information, in accordance with regulations under section 6 above; or

(c) fails to deliver any document or furnish any particulars in accordance with the provisions applied by section 8(1) above,

he shall be liable, subject to section 10 below, to the penalties mentioned in subsection (4) below.

(4) The penalties are—

(a) a penalty not exceeding £300; and

(b) if the failure continues after a penalty is imposed under paragraph (a) above, a further penalty or penalties not exceeding £60 for each day on which the failure continues after the day on which the penalty under that paragraph was imposed (but excluding any day for which a penalty under this paragraph has already been imposed).

(5) Where a person fraudulently or negligently—

(a) furnishes any incorrect information or evidence of a kind mentioned in regulations under section 5(1)(h) or (hh) of the Administration Act so far as relating to tax credit;

(b) produces any incorrect document or record, or provides any incorrect information, of a kind mentioned in regulations under section 6 above; or

(c) delivers any incorrect document or furnishes any incorrect particulars of a kind mentioned in the provisions applied by section 8(1) above,

he shall be liable to a penalty not exceeding £3,000.

(6) Where, in the case of any employee—

(a) an employer refuses or repeatedly fails to make payments of tax credit in accordance with regulations under section 6 above; and

(b) the Board cancels the notification of entitlement with a view to the payments being made by officers of the Board,

the employer shall be liable to a penalty not exceeding £3,000.

(7) Where, in the case of any employee, an employer fraudulently or negligently—

(a) makes or receives incorrect payments in a tax year in pursuance of regulations under section 6 above; or

(b) delivers an incorrect return of payments made or received by him in that year in pursuance of such regulations,

he shall be liable, subject to section 10 below, to a penalty not exceeding £3,000; but no such penalty shall be imposed in respect of any incorrect payments in respect of which a penalty has been imposed under subsection (6) above.

(8) In this section “the Administration Act” means the [1992 c. 5.] Social Security Administration Act 1992 or the [1992 c. 8.] Social Security Administration (Northern Ireland) Act 1992.

10 Penalties: supplementary

(1) No penalty shall be imposed—

(a) under subsection (4) of section 9 above in respect of a failure within subsection (3)(a) or (c) of that section; or

(b) under subsection (4)(b) of that section in respect of a failure within subsection (3)(b) of that section,

at any time after the failure has been remedied.

(2) A penalty under section 9(7) above shall not be imposed before the end of the tax year in question; and no more than one such penalty may be imposed (by reference to any one employee) in relation to any tax year.

(3) Section 118(2) of the [1970 c. 9.] Taxes Management Act 1970 (extra time for compliance etc.) shall apply for the purposes of section 9(3) and (6) above as it applies for the purposes of that Act.

(4) Schedule 4 to this Act (penalties: procedure and appeals) shall have effect.

11 Liability of company directors etc

(1) Sections 121C and 121D of the Social Security Administration Act 1992 (liability of directors etc. for company’s contributions), and sections 115B and 115C of the Social Security Administration (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland), shall apply in relation to amounts—

(a) which the Board have paid or credited to a body corporate for the purpose of funding tax credit; and

(b) which the body is liable, and has failed, to repay,

as they apply in relation to national insurance contributions which a body corporate is liable, and has failed, to pay.

(2) Those sections as they so apply shall have effect as if—

(a) any reference to Secretary of State or the Department were a reference to an officer of the Board;

(b) any reference to an appeal tribunal constituted under Chapter I of Part I of the [1998 c. 14.Social Security Act] 1998 or Chapter I of Part II of the [S.I. 1998/1506 (N.I.10).] Social Security (Northern Ireland) Order 1998 were a reference to the Special Commissioners;

(c) the reference in sections 121C(1)(a) and 115B(1)(a) to the time prescribed for the purpose there mentioned were a reference to the time prescribed for that purpose by regulations made by the Board; and

(d) the definitions of “appeal tribunal” in sections 121D(6) and 115C(6) were omitted.

(3) Regulations under subsection (2)(c) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

12 Disclosure of information

(1) Section 182 of the [1989 c. 26.] Finance Act 1989 (disclosure of information) shall be amended in accordance with subsections (2) to (5) below.

(2) In subsection (1)—

(a) after “tax functions” there shall be inserted “, tax credit functions”; and

(b) after paragraph (a) there shall be inserted—

“(aa) to working families' tax credit or disabled person’s tax credit in respect of any identifiable person,”.

(3) After subsection (2) there shall be inserted—

“(2AA) In this section “tax credit functions” means the functions relating to working families' tax credit or disabled person’s tax credit—

(a) of the Board and their officers,

(b) of any person carrying out the administrative work of the General Commissioners or the Special Commissioners, and

(c) of any other person providing, or employed in the provision of, services to any person mentioned in paragraph (a) or (b) above.”

(4) In subsection (4)—

(a) in paragraph (b), after “tax functions” there shall be inserted “, tax credit functions”; and

(b) in paragraph (c), after “tax functions” there shall be inserted “, tax credit functions” and after sub-paragraph (i) there shall be inserted—

“(ia) to working families' tax credit or disabled person’s tax credit in respect of any identifiable person,”.

(5) In subsection (5)(b), after “tax or duty” there shall be inserted “, to working families' tax credit or disabled person’s tax credit”.

(6) Schedule 5 to this Act (use and exchange of information) shall have effect.

13 Documents and forms

Documents and forms relating to payment periods beginning before the commencement of this section may be used on and after that date even though they contain references to family credit or disability working allowance.

Miscellaneous and supplemental

14 Persons qualifying for disabled person’s tax credit

(1) Subject to subsection (6) below, section 129 of the [1992 c. 4.] Social Security Contributions and Benefits Act 1992 (disabled person’s tax credit) and section 128 of the [1992 c. 7.] Social Security Contributions and Benefits (Northern Ireland) Act 1992 (equivalent provision for Northern Ireland) shall be amended in accordance with subsections (2) to (5) below.

(2) In subsection (1), for “or (2A)” there shall be substituted “, (2A) or (2C)”.

(3) In subsection (2)(a), for “56 days” there shall be substituted “182 days”.

(4) After subsection (2B) there shall be inserted the following subsections—

“(2C) A person qualifies under this subsection if—

(a) the condition mentioned in subsection (2D) below is satisfied;

(b) a medical practitioner (within the meaning of the Administration Act) certifies, not more than 14 days before the date when the claim for disabled person’s tax credit is made—

(i) that in his opinion the person will continue to have the disability in question for a period of at least six months; or

(ii) that in his opinion the person will continue to have that disability for the remainder of his life; and

(c) the level of the person’s expected earnings is lower, by at least the required amount, than it would have been if he had not had the disability.

(2D) The condition is that there are 140 qualifying days, the last falling within the period of 56 days immediately preceding the date when the claim for disabled person’s tax credit is made, which are days in respect of which—

(a) statutory sick pay has been payable to the person;

(b) the lower rate of short-term incapacity benefit has been payable to him;

(c) income support has been payable to him on grounds of incapacity; or

(d) earnings have been credited to him under regulations made under section 22(5) above.

(2E) For the purposes of subsections (2C) and (2D) above—

(a) the required amount, in relation to a person’s expected earnings, is—

(i) 20 per cent of what those earnings would have been if he had not had the disability; or

(ii) if the amount given by sub-paragraph (i) above is less than the prescribed amount, the prescribed amount;

(b) qualifying days are days forming part of a single period of incapacity for work within the meaning of Part XI of this Act; and

(c) income support is payable to a person on grounds of incapacity if and only if he satisfies the condition in section 124(1)(e) above by virtue of being a person who—

(i) is, or is treated as, incapable of work for any purposes of this Act; or

(ii) is treated as capable of work by virtue of regulations under section 171E below.

(2F) Sections 3 and 112 above shall apply as if this section were included in Parts I to V of this Act.”

(5) In subsection (8), after “allowance” there shall be substituted “, or the level of a person’s expected earnings,”.

(6) In section 128(2E)(c) of the [1992 c. 7.] Social Security Contributions and Benefits (Northern Ireland) Act 1992, as inserted by subsection (4) above, for “124(1)(e)” there shall be substituted “123(1)(e)” and for “171E” there shall be substituted “167E”.

(7) In section 11(3)(b) of the [1992 c. 5.] Social Security Administration Act 1992 (repeat claims), for the words from “he” to “that paragraph” there shall be substituted—

“(i) he qualified under subsection (2) of section 129 of the Contributions and Benefits Act by virtue of paragraph (a) of that subsection, or of there being payable to him a benefit under an enactment having effect in Northern Ireland and corresponding to a benefit mentioned in that paragraph; or

(ii) he qualified under subsection (2C) of that section or of section 128 of the Northern Ireland Contributions and Benefits Act,”.

(8) In section 9(3)(b) of the [1992 c. 8.] Social Security Administration (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland), for the words from “he” to “that paragraph” there shall be substituted—

“(i) he qualified under subsection (2) of section 128 of the Contributions and Benefits Act by virtue of paragraph (a) of that subsection, or of there being payable to him a benefit under an enactment having effect in Great Britain and corresponding to a benefit mentioned in that paragraph; or

(ii) he qualified under subsection (2C) of that section or of section 129 of the Great Britain Contributions and Benefits Act,”.

(9) This section, except subsection (3) above (and subsection (1) above so far as relating to that subsection), applies to claims made, or treated as made, on or after 1st October 2000.

15 New category of child care providers for tax credit purposes

(1) The Secretary of State may by regulations make a scheme for establishing a new category of persons whose charges for providing child care are to be taken into account for the purpose of determining—

(a) the appropriate maximum working families' tax credit for the purposes of section 128(5) of the [1992 c. 4.] Social Security Contributions and Benefits Act 1992 or section 127(5) of [1992 c. 7.] the Social Security Contributions and Benefits (Northern Ireland) Act 1992; or

(b) the appropriate maximum disabled person’s tax credit for the purposes of section 129(8) of the Social Security Contributions and Benefits Act 1992 or section 128(8) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

(2) A scheme so made shall—

(a) provide that a person shall not fall within the new category unless he is approved by an accredited organisation in accordance with such criteria as may be determined by or under the scheme;

(b) authorise the making of grants or loans to, and the charging of reasonable fees by, accredited organisations; and

(c) include such other provisions as the Secretary of State considers necessary or expedient.

(3) In subsection (2) above “accredited”, in relation to an organisation, means accredited by the Secretary of State in accordance with such criteria as may be determined by or under the scheme.

(4) Regulations under this section—

(a) may make different provision for different cases or circumstances or for different areas;

(b) may make such incidental, supplemental, consequential and transitional provision as appears to the Secretary of State to be necessary or expedient; and

(c) shall be made by statutory instrument which, subject to subsection (5) below, shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5) A draft of the first regulations to be made under this section shall be laid before each House of Parliament and those regulations shall not be made unless the draft has been approved by a resolution of each House.

16 Northern Ireland

(1) Working families' tax credit and disabled person’s tax credit shall be excepted matters for the purposes of the [1998 c. 47.] Northern Ireland Act 1998.

(2) For the purposes of that Act, a provision of—

(a) any Act of the Northern Ireland Assembly; or

(b) any Bill for such an Act,

which amends or repeals a provision to which subsection (3) below applies shall not be treated as dealing with working families' tax credit or disabled person’s tax credit if the amendment or repeal affects rights conferred by Schedule 3 to this Act and other employment rights in the same way.

(3) This subsection applies to the provisions of the [S.I. 1996/1919 (N.I.16).] Employment Rights (Northern Ireland) Order 1996 which are amended or applied by Schedule 3 to this Act.

17 Financial provisions

(1) There shall be paid out of money provided by Parliament—

(a) any expenses incurred by the Board or the Secretary of State in consequence of this Act; and

(b) any increase attributable to this Act in the sums payable out of money so provided under any other Act.

(2) There shall be paid into the Consolidated Fund any increase attributable to this Act in the sums payable into that Fund under any other Act.

18 Interpretation

In this Act, except where the context otherwise requires—

• “appeal tribunal” means an appeal tribunal constituted under Chapter I of Part I of the [1998 c. 14.] Social Security Act 1998 or Chapter I of Part II of the [S.I. 1998/1506 (N.I.10).] Social Security (Northern Ireland) Order 1998;

• “the Board” means the Commissioners of Inland Revenue;

• “the Department” means the Department of Health and Social Services for Northern Ireland;

• “employer” and “employee” shall be construed in accordance with section 6 above;

• “General Commissioners” and “Special Commissioners” have the same meanings as in the [1970 c. 9.] Taxes Management Act 1970;

• “payment period” means a period for which amounts are payable to a person by virtue of—

  (a)

  section 128(3) of the [1992 c. 4.] Social Security Contributions and Benefits Act 1992 (family credit) or section 129(6) of that Act (disability working allowance); or

  (b)

  section 127(3) or 128(6) of the [1992 c. 7.] Social Security Contributions and Benefits (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland);

• “tax credit” means working families' tax credit or disabled person’s tax credit;

• “tax year” means any period of a year beginning on 6th April.

19 Transitional provision, savings and repeals

(1) Any function falling within subsection (1)(a) or (c) of section 2 above which is a power to make subordinate legislation may be exercised by the Treasury or, as the case may be, the Board at any time after the passing of this Act if the subordinate legislation made in the exercise of the power comes into force after the commencement of that section.

(2) Nothing in section 2 above affects the validity of anything done by or in relation to the Secretary of State or the Department before the commencement of that section; and anything which at that date is in the process of being done by or in relation to the Secretary of State or the Department may—

(a) if it relates to functions transferred by subsection (1) of section 2 above to the Treasury, be continued by or in relation to the Treasury;

(b) if it relates to functions transferred by that subsection to the Board or an officer of the Board, be continued by the Board or, as the case may be, an officer of the Board.

(3) Any authority, appointment, decision, determination, approval, consent or direction given or made or other thing done, or having effect as if given, made or done, by the Secretary of State or the Department in connection with functions transferred by subsection (1) of section 2 above shall have effect as if given, made or done by the Treasury or, as the case requires, the Board or an officer of the Board in so far as that is required for continuing its effect after the commencement of that section.

(4) The enactments specified in Schedule 6 to this Act are repealed to the extent specified in the third column of that Schedule.

20 Short title, commencement and extent

(1) This Act may be cited as the Tax Credits Act 1999.

(2) This Act, except—

(a) this section;

(b) section 6;

(c) subsections (2) and (4) to (9) of section 14 (and subsection (1) of that section, except so far as relating to subsection (3)); and

(d) subsection (1) of section 19,

shall come into force on 5th October 1999.

(3) This Act extends to Northern Ireland.

SCHEDULES

Section 1(2).

SCHEDULE 1 Provision consequential on renaming of benefits

1 In the enactments mentioned in paragraphs 2 to 6 below—

(a) for the words “family credit”, wherever they occur, there shall be substituted the words “working families' tax credit”; and

(b) for the words “disability working allowance”, wherever they occur, there shall be substituted the words “disabled person’s tax credit”.

2 In the [1992 c. 4.] Social Security Contributions and Benefits Act 1992 the enactments are—

(a) section 30C(5) (days etc. of incapacity for work);

(b) section 42(1) (entitlement to certain benefits after period of employment etc.);

(c) section 45A(1) and (2) (effect of family credit and disability working allowance on earnings factor);

(d) section 68(10) (entitlement to severe disablement allowance);

(e) section 122(1) (meaning of “week” etc.);

(f) section 123(1)(b) and (c) (income related benefits);

(g) section 128(1) to (6) (family credit);

(h) section 129(1), (2), (2A)(a) and (5) to (9) (disability working allowance).

3 In the [1992 c. 5.] Social Security Administration Act 1992 the enactments are—

(a) section 5(2)(c) and (d) (regulations about claims etc.);

(b) section 11(1) (initial and repeat claims);

(c) section 71(11)(c) and (d) (overpayments);

(d) section 124(2)(b) (provisions relating to age, death and marriage);

(e) section 150(10)(b)(i) and (ii) (transitional provision in relation to uprating);

(f) section 163(2)(d)(ii) and (iii) (payment out of money provided by Parliament);

(g) section 179(5)(b) and (c) (reciprocal agreements with countries outside UK);

(h) section 191 (general interpretation).

4 In the [1992 c. 7.] Social Security Contributions and Benefits (Northern Ireland) Act 1992 the enactments are—

(a) section 30C(5) (days etc. of incapacity for work);

(b) section 42(1) (entitlement to certain benefits after period of employment etc.);

(c) section 45A(1) and (2) (effect of family credit and disability working allowance on earnings factor);

(d) section 68(10) (entitlement to severe disablement allowance);

(e) section 121(1) (meaning of “week” etc.);

(f) section 122(1)(b) and (c) (income related benefits);

(g) section 127(1) to (6) (family credit);

(h) section 128(1), (2), (2A)(a) and (5) to (9) (disability working allowance).

5 In the [1992 c. 8.] Social Security Administration (Northern Ireland) Act 1992 the enactments are—

(a) section 5(2)(c) and (d) (regulations about claims etc.);

(b) section 9(1) (initial and repeat claims);

(c) section 69(11)(c) and (d) (overpayments);

(d) section 155(5)(b) and (c) (reciprocal agreements with countries outside UK);

(e) section 167 (interpretation).

6 In other legislation the enactments are—

(a) note (a) to Part I of Schedule 6 to the [1980 c. 43.] Magistrates' Courts Act 1980 (fees to be taken by Clerks to Justices);

(b) section 70(2)(b) of the [1982 c. 49.] Transport Act 1982 (payments in respect of applicants for exemption from wearing seat belts);

(c) section 617(2)(a) of the [1988 c. 1.] Income and Corporation Taxes Act 1988 (benefits not treated as income for purposes of Income Tax Acts);

(d) in the [1989 c. 41.] Children Act 1989—

(i) section 17(9) (persons not liable to make repayments of assistance);

(ii) section 29(3) (persons not liable to pay certain charges);

(iii) paragraph 21(4) of Schedule 2 (persons not liable to contribute towards maintenance);

(e) Article 131(3)(b) of the [S.I. 1989/2406(N.I. 20).] Education Reform (Northern Ireland) Order 1989 (charges and remissions policies);

(f) in the [1991 c. 48.] Child Support Act 1991—

(i) section 47(3)(b) (fees);

(ii) section 54 (interpretation);

(g) in the [S.I. 1991/2628(N.I. 23).] Child Support (Northern Ireland) Order 1991—

(i) Article 2(2) (interpretation);

(ii) Article 44(2)(b) (fees);

(h) section 29(7)(a) and (b) of the [1995 c. 18.] Jobseekers Act 1995 (pilot schemes);

(i) section 24(2) of the [1995 c. 34.] Child Support Act 1995 (compensation payments);

(j) section 22(4)(a) of the [1995 c. 36.] Children (Scotland) Act 1995 (persons not liable to make repayments of assistance);

(k) in the [S.I. 1995/755(N.I. 2).] Children (Northern Ireland) Order 1995;

(i) Article 2(2) (interpretation);

(ii) Article 18(9) (persons not liable to make repayments of assistance);

(iii) Article 24(3) (persons not liable to pay certain charges);

(iv) Article 39(4) (persons not liable to contribute towards maintenance);

(l) Article 17(2) of the [S.I. 1995/2702(N.I.13).] Child Support (Northern Ireland) Order 1995 (compensation payments);

(m) Article 31(7)(a) and (b) of the [S.I. 1995/2705(N.I.15).] Jobseekers (Northern Ireland) Order 1995 (pilot schemes);

(n) Article 25(2) of the [S.I. 1995/2994(N.I.18).] Road Traffic (Northern Ireland) Order 1995 (payments in respect of applicants for exemption from wearing seat belts);

(o) section 77(1)(e) of the [1996 c. 53.] Housing Grants, Construction and Regeneration Act 1996 (entitlement to home repair assistance);

(p) section 457(4)(b)(ii) and (iv) of the [1996 c. 56.] Education Act 1996 (charges and remissions policies);

(q) section 8(3)(d) and (e) of the [1998 c. 14.] Social Security Act 1998 (power of Secretary of State to decide claims);

(r) Article 9(3)(d) and (e) of the [S.I. 1998/1506(N.I.10).] Social Security (Northern Ireland) Order 1998 (power of Department to decide claims).

Section 2.

SCHEDULE 2 Transfer of functions

Part I Provisions conferring functions transferred to Treasury

1 In the [1992 c. 4.] Social Security Contributions and Benefits Act 1992—

(a) section 45A(2)(a) (calculation of additional pension);

(b) section 123(1)(b) and (c) (power to prescribe schemes for working families' tax credit and disabled person’s tax credit);

(c) section 128 (entitlement to working families' tax credit etc.);

(d) section 129 (entitlement to disabled person’s tax credit etc.);

(e) section 134(1) and (2) (exclusions from benefit based on capital or entitlement to other benefits);

(f) section 135(1) and (2) (applicable amount);

(g) section 136 (income and capital).

2 Section 150 (annual uprating of benefits) of the [1992 c. 5.] Social Security Administration Act 1992.

3 In the [1992 c. 7.] Social Security Contributions and Benefits (Northern Ireland) Act 1992—

(a) section 45A(2)(a) (calculation of additional pension);

(b) section 122(1)(b) and (c) (power to prescribe schemes for working families' tax credit and disabled person’s tax credit);

(c) section 127 (entitlement to working families' tax credit etc.);

(d) section 128 (entitlement to disabled person’s tax credit etc.);

(e) section 130(1) and (2) (exclusions from benefit based on capital or entitlement to other benefits);

(f) section 131(1) and (2) (applicable amount);

(g) section 132 (income and capital).

4 Section 132 (annual uprating of benefits) of the [1992 c. 8.] Social Security Administration (Northern Ireland) Act 1992.

Part II Provisions conferring functions transferred to officers of Board

5 In the Social Security Act 1998—

(a) section 1(a) (certain functions transferred to Secretary of State); and

(b) in Chapter II of Part I—

(i) section 8(1)(a) and (c) (certain decisions);

(ii) so much of section 9(1) as confers power to revise decisions under section 8 of that Act; and

(iii) section 11(2) and (3) (questions of fact requiring special expertise).

6 In the [S.I. 1998/1506(N.I.10).] Social Security (Northern Ireland) Order 1998—

(a) Article 3(a) (certain functions transferred to Department); and

(b) in Chapter II of Part II—

(i) Article 9(1)(a) and (c) (certain decisions);

(ii) so much of Article 10(1) as confers power to revise decisions under Article 9 of that Order; and

(iii) Article 12(2) and (3) (questions of fact requiring special expertise).

Part III Provisions conferring functions transferred to Board

7 Such of the provisions of—

(a) the [1992 c. 4.] Social Security Contributions and Benefits Act 1992;

(b) the [1992 c. 5.] Social Security Administration Act 1992, except Part XIII (advisory bodies and consultation);

(c) the [1992 c. 7.] Social Security Contributions and Benefits (Northern Ireland) Act 1992; and

(d) the [1992 c. 8.] Social Security Administration (Northern Ireland) Act 1992, except Part XII (advisory bodies and the duty to consult),

as are not mentioned in Part I of this Schedule.

8 Such of the provisions of—

(a) Chapter II of Part I of the [1998 c. 14.] Social Security Act 1998 (which makes provision about social security decisions and appeals); and

(b) Chapter II of Part II of the Social Security (Northern Ireland) Order 1998 (which makes similar provision for Northern Ireland),

as are not mentioned in Part II of this Schedule.

9 Any subordinate legislation made under any of the provisions mentioned in Part I of this Schedule or this Part.

Part IV Modification of enactments

10 (1) Section 71 of the Social Security Administration Act 1992 (overpayments: general), and section 69 of the Social Security Administration (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland), shall have effect in any case where the overpayment was made in respect of tax credit as if for subsections (8) and (9) there were substituted—

“(8) An amount recoverable under subsection (1) above in any year of assessment—

(a) shall be treated for the purposes of Part VI of the [1970 c. 9.] Taxes Management Act 1970 (collection and recovery) as if it were tax charged in an assessment and due and payable;

(b) shall be treated for the purposes of section 203(2)(a) of the [1988 c. 1.] Income and Corporation Taxes Act 1988 (PAYE) as if it were an underpayment of tax for a previous year of assessment.

(8A) Where—

(a) an amount paid in respect of a claim is recoverable under subsection (1) above; and

(b) a penalty has been imposed under section 9(1) of the Tax Credits Act 1999 (penalties for fraud etc.) on the ground that a person fraudulently or negligently made an incorrect statement or declaration in connection with that claim,

the amount shall carry interest at the rate applicable from the date on which it becomes recoverable until payment.

(9) The rate applicable for the purposes of subsection (8A) above shall be the rate from time to time prescribed under section 178 of the [1989 c. 26.] Finance Act 1989 for those purposes.”

(2) After paragraph (gg) of section 178(2) of the Finance Act 1989 (setting rates of interest) there shall be inserted—

“(gh) section 71(8A) of the [1992 c. 5.] Social Security Administration Act 1992, and section 69(8A) of the [1992 c. 8.] Social Security Administration (Northern Ireland) Act 1992, as they have effect in any case where the overpayment was made in respect of working families' tax credit or disabled person’s tax credit;”.

11 The following sections—

(a) section 110 of the [1992 c. 5.] Social Security Administration Act 1992 (appointment and powers of inspectors); and

(b) section 104 of the [1992 c. 8.] Social Security Administration (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland),

shall not apply to the extent that the provisions, matters or Acts concerned relate to tax credit or in any case where the benefit concerned is tax credit.

12 The following sections—

(a) section 111 of the Social Security Administration Act 1992 (delay, obstruction etc. of inspector); and

(b) section 105 of the Social Security Administration (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland),

shall not apply in any case where the exercise of the power, or the question, information or document, relates to tax credit.

13 The following sections—

(a) sections 111A and 112 of the Social Security Administration Act 1992 (dishonest and fraudulent representations); and

(b) sections 105A and 106 of the Social Security Administration (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland),

shall not apply in any case where the benefit or other payment or advantage is or relates to, or the failure to notify relates to, tax credit.

14 The following sections—

(a) section 113 of the Social Security Administration Act 1992 (breach of regulations); and

(b) section 107 of the Social Security Administration (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland),

shall not apply in the case of a provision relating to tax credit.

15 The following sections—

(a) section 115A of the Social Security Administration Act 1992 (penalty as alternative to prosecution); and

(b) section 109A of the Social Security Administration (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland),

shall not apply in any case where the overpayment is in respect of tax credit.

16 The following sections—

(a) sections 182A and 182B of the Social Security Administration Act 1992 (return and redirection of post); and

(b) sections 158A and 158B of the Social Security Administration (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland),

shall not apply in any case where the social security post, or the offences or the information the accuracy of which is to be checked, relates to tax credit.

17 The words “, family credit” shall cease to have effect in—

(a) section 6(1) of the [1991 c. 23.] Child Support Act 1991 (recovery of child support maintenance from absent parent); and

(b) Article 9(1) of the [S.I. 1991/2628(N.I.23).] Child Support (Northern Ireland) Order 1991 (corresponding provision for Northern Ireland).

18 (1) The words “Disability working allowance” shall cease to have effect in—

(a) column 2 of Schedule 2 to the [1997 c. 27.] Social Security (Recovery of Benefits) Act 1997 (benefits which are listed benefits for the purposes of that Act); and

(b) column 2 of Schedule 2 to the [S.I. 1997/1183(N.I.12).] Social Security (Recovery of Benefits) (Northern Ireland) Order 1997 (benefits which are listed benefits for the purposes of that Order).

(2) Nothing in sub-paragraph (1) above shall affect the operation of that Act or that Order in cases where the payments or likely payments referred to in section 1(1)(b) of that Act or, as the case may be, Article 3(1)(b) of that Order are for a payment period beginning before the commencement of that sub-paragraph.

19 The following provisions—

(a) section 27 of the [1998 c. 14.] Social Security Act 1998 (restrictions on entitlement to benefit in certain cases of error); and

(b) Article 27 of the [S.I. 1998/1506(N.I.10).] Social Security (Northern Ireland) Order 1998 (corresponding provision for Northern Ireland),

shall not apply in any case where the determination relates to tax credit.

Part V Consequential provisions

References to Secretary of State etc.

20 In accordance with section 2(1) above—

(a) section 175 of the [1992 c. 4.] Social Security Contributions and Benefits Act 1992 (regulations, orders etc.);

(b) section 176(3) of that Act (statutory instruments that are subject to negative procedure);

(c) section 189 of the [1992 c. 5.] Social Security Adminstration Act 1992 (regulations and orders);

(d) section 190(3) of that Act (certain statutory instruments subject to negative procedure);

(e) section 172(9) of the [1992 c. 7.] Social Security Contributions and Benefits (Northern Ireland) Act 1992 (certain statutory instruments subject to negative procedure);

(f) section 132(1) of the [1992 c. 8.] Social Security Administration (Northern Ireland) Act 1992 (corresponding order for uprating of benefits);

(g) section 79(1) of the [1998 c. 14.] Social Security Act 1998 (regulations and orders); and

(h) section 80(2) of that Act (certain statutory instruments subject to negative procedure),

shall be construed, in relation to tax credit, as if references in those provisions to the Secretary of State were references to the Treasury or, as the case may be, the Board.

21 In relation to tax credit, references in Chapter II of Part I of the Social Security Act 1998 (social security decisions and appeals) to a decision of the Secretary of State shall, where the context so requires in consequence of section 2(1) above, be construed as references to a decision of the Board or, as the case may be, an officer of the Board.

References to Department etc.

22 In accordance with section 2(1) above—

(a) section 171(1) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992;

(b) section 165(1) of the Social Security Administration (Northern Ireland) Act 1992; and

(c) Article 74(1) of the [S.I. 1998/1506(N.I.10).] Social Security (Northern Ireland) Order 1998 (regulations and orders),

(which provide for regulations and orders to be made by the Department) shall be construed, in relation to tax credit, as if the references in those provisions to the Department were references, as the case may be, to the Treasury or the Board.

23 In relation to tax credit, references in Chapter II of Part II of the Social Security (Northern Ireland) Order 1998 (social security decisions and appeals) to a decision of the Department shall, where the context so requires in consequence of section 2(1) above, be construed as references to a decision of the Board or, as the case may be, an officer of the Board.

Social Security Contributions and Benefits Act 1992

24 Section 123(2) of the [1992 c. 4.] Social Security Contributions and Benefits Act 1992 (public inspection of schemes prescribed under section 123(1)) shall be construed, in relation to tax credit, as if the reference to local offices of the Department of Social Security were a reference to offices of the Board.

25 Section 175(7) of that Act (regulations and orders exercisable only in conjunction with Treasury) does not apply in relation to regulations made by the Treasury by virtue of section 2(1) above.

Social Security Administration Act 1992

26 Sub-paragraphs (i) and (ii) of paragraph (a) of subsection (1) of section 165 of the [1992 c. 5.] Social Security Administration Act 1992 (which provides for adjustments between the National Insurance Fund and the Consolidated Fund) shall cease to have effect.

27 Section 189(8) of that Act (orders and regulations which require Treasury consent) does not apply in relation to orders made by the Treasury by virtue of section 2(1) above.

Social Security Contributions and Benefits (Northern Ireland) Act 1992

28 Section 122(2) of the [1992 c. 7.] Social Security Contributions and Benefits (Northern Ireland) Act 1992 (public inspection of schemes prescribed under section 122(1)) shall be construed, in relation to tax credit, as if the reference to social security offices of the Department were a reference to offices of the Board.

29 Any power to make regulations conferred by the Social Security Contributions and Benefits (Northern Ireland) Act 1992 is exercisable, so far as it relates to tax credit, by statutory instrument; and section 171(2) of that Act (regulations etc. to be made by statutory rule) has effect subject to this paragraph.

30 Any power u