TCM0288560 - Specialist areas - international claims: manually paying WTC up front

Reasons not to follow this guidance

You do not need to follow this guidance if

  • the claim is post award for both WTC and CTC
  • for migrant workers only, the customer living in the UK is not working
  • the customer is a Crown Servant or someone who works in the Navy, Army, Air Force Institute (NAAFI).

Checklist

Before you follow this guidance make sure

  • you have already followed the guidance in TCM0288580
  • you follow the guidance in TCM0138020
  • you have made a note of the type of verification failure. For how to do this, use TCM1000107
  • the award periods will not extend past PY-1 and earlier
  • you know how to access and use the SEES ‘Tax Credits Entitlement Calculator’
  • you have the correct user roles to follow this guidance. Use the B&C Roles and Access Catalogue. You can find this by going to the Benefits & Credits homepage, selecting ‘R’ on the B&C A-Z index, selecting ‘Roles and Access Process’, selecting ‘Roles & Access Catalogue’ from the Related links menu
  • you are in the correct MU. Use TCM0322460 for the correct MU number. Your manager will be able to tell you this.
  • no payments are made to Slovakian nationals until all enquiries are completed.

Background

Claims will be received from European Union (EU) nationals who are migrant workers and their children and young persons are residing in the European Union Member States, or cross border workers who live with their families in the EU Member State, and / or are disabled, and travel to work in the UK, or live with their families in the UK, and travel to work in the EU Member State, and / or are disabled. To be eligible the customer working in the UK must be compulsory insured in the UK - by this we mean liable to and paying Class 1 or Class 2 National Insurance (NI) contributions.

A customer may have earnings that are above the Lower Earnings Limit (LEL) but below the Primary Threshold (PT) and Class 1 NI contributions are not being paid. In these instances the customer is actually treated as having paid Class 1 NI contributions. The customer will satisfy the relevant entitlement conditions for UK family benefits to be paid under EC Member State regulations.

An employment check is necessary to determine whether the EC member state regulations can be applied.

Where the earnings of the customer, or their partner, fall

  • above the LEL
  • below the PT, and
  • Class 1 NI contributions have not been paid

they should be treated as having paid Class 1 NI contributions and regarded as being subject to UK legislation.

Note: For cross border workers where both customers and the child(ren) live in the EU Member State, and / or are disabled, only one customer needs to be compulsorily insured in the UK.

Note: If cross border workers live in the UK but work in the EU Member State they do not need to pay UK NI contributions.

In these cases you will need to verify the make up of the family members living in the EU Member State and check to see if the customer in the UK is liable to pay and paying Class 1 or Class 2 NI contributions before you can pay Child Tax Credit (CTC) to the customer. For cross border workers where the customer(s) and the children live in the UK, but one or both customers works in the EU Member State, they will still qualify for WTC, either with the Second Adult or Lone Parent elements.

If the customer qualifies for Working Tax Credit (WTC) you may be able to pay WTC upfront whilst making any enquiries needed to pay CTC.

This guidance explains how to calculate and pay WTC upfront.

Guidance

Note: When sending customer, staff or process data to another individual or team, make sure you follow the latest data security guidelines or contact the Data Guardian or Data Security Team for advice.

Note: Remember, when dealing with any referrals from Compliance, to update the Compliance officer by phone once your actions are complete and give the information they ask for.

Step 1

Check the TC648 and establish if the customer is liable to pay and paying either Class 1 NI contributions or Class 2 NI contributions.

If you did not need to consider whether the customer is liable to pay and paying Class 1 or Class 2 NI contributions, go to Step 3.

If the TC648 confirms the customer is liable to pay and paying Class 1 or Class 2 NI contributions, go to Step 3.

If the TC648 confirms the customer is not liable to pay and is not paying Class 1 or Class 2 NI contributions, go to Step 2.

If you are returning to this guidance following the return of an enquiry about CTC, go to Step 2.

Step 2

If the customers are migrant or cross border workers who work in the UK, go to Step 12.

If the customers are cross border workers who live in the UK and work in the EU Member State

  • process the claim to status ‘Award Issued’. For how to do this, use TCM1000135
    Note: You must access ‘Amend Application Corrections’ following the process at Step 10
  • update the manual file with the action you have taken
  • go to Step 13.

Step 3

Check the Child Benefit International Group Database (IGDB) to determine if all the E400 series forms have been returned from the EU Member State.

If all the E400 series forms or SEDs have been returned from the EU Member State, go to Step 4.

If all the E400 series forms or SEDs have not been returned from the EU Member State, go to Step 5.

Step 4

Check if the information on the E400 series forms or SEDs matches the information the customer has provided.

If the information on the E400 series forms or SEDs matches the information provided by the customer, follow the guidance in TCM0288520.

If the information on the E400 series forms or SEDs does not match the information provided by the customer

  • make a note on the form TC648 of any differences
  • go to Step 5.

Step 5

Check if there are any linked work list items for this claim. For how to do this, use TCM1000142.

If there are linked work list items

  • enter the following on form TC648
    • the name of the work list
    • the MU number the work list is on
  • transfer the work list item to your MU. For how to do this, use TCM1000023
  • go to Step 6.

If there are no linked work list items, go to Step 6.

Step 6

Check the manual file to determine if you have made a note that the customer has reported a change of circumstances.

Note: From 6 April 2012 notified change of circumstances which will result in an increase in entitlement will be backdated to a maximum of 1 calendar month.

Note: From 6 April 2012 notified change of circumstances which do not result in an increase in entitlement will continue to be backdated to the date of change if appropriate.

Note: This change of circumstances could have been reported by a work list entry, a Work Area Mailbox (WAM) referral or a change the customer has reported in writing.

If the customer has not reported a change of circumstances, go to Step 7.

If the customer has reported a change of circumstances, contact your Technical Advice Line Liaison Officer (TALLO) for advice on what to do.

Step 7

Using the SEES ‘Tax Credits Entitlement Calculator’ calculate the customer’s WTC entitlement at the date of entitlement. For how to do this, use TCM1000287.

Note: For migrant workers living in the UK with a partner living in the EU Member State, only use the income figure of the customer living in the UK. The customer will only be entitled to the WTC basic element, 30 hour premium and if applicable the disability element. Do not include the second adult or lone parent element. The effective date of claim of your calculation will be the date the claim was received. Do not backdate the award at this stage.
Note: Cross Border workers working in the UK but who normally live with their child(ren) in the EU Member State will also be entitled to claim the Lone Parent element of WTC, once the children have been verified by one form of identity document and through the e-form or SEDs. The effective date of claim of your calculation will be the date the claim was received. Do not backdate the award at this stage.
Note: Cross border claims where the worker is a member of a couple and the couple are ordinarily resident in the UK but one or both work in the EU Member State will be entitled to make a joint claim to WTC including the second adult element if the are aged 16 or over and working at least 24 hours a week, with one customer working at least 16 hours weekly. The effective date of claim of your calculation will be the date the claim was received. Do not backdate the award at this stage.

Note: Where the period from the start of the date of claim to today’s date has passed 5 April, you will need a separate entitlement calculation for both the previous year (PY) and current year (CY).

  • print off a copy of the SEES calculation to keep with the manual file
  • go to Step 9.

Step 8

If the TC648 confirms the customer is not liable to pay and is not paying Class 1 or Class 2 NI contributions, go to Step 10.

If the TC648 confirms the customer is liable to pay and paying Class 1 or Class 2 NI contributions

Check the manual file to determine if all the following details are noted

  • the following details of all the children and/or young persons
    • full name
    • date of birth
    • child responsibility start date, if it is different from the date of birth
  • main carer details
  • payment frequency
  • whether the customer has provided details of a bank account.
  • go to Step 9.

Step 9

If all the details are noted in the manual file, go to Step 10.

If all the details are not noted in the manual file

  • obtain the missing details from the tax credits computer. For how to do this, use TCM1000249
  • update the manual file with the missing details
  • go to Step 10.

Step 10

Access function ‘Manage Verification Failures’ for the claim you are working. For how to do this, use TCM1000004 and TCM1000107

Note: You must access function ‘Manage Verification Failures’ from the Verification Failures work list and not directly from the ‘Function Menu’.

Step 11

If the TC648 confirms the customer is not liable to pay and is not paying Class 1 or Class 2 NI contributions, go to Step 12.

If the TC648 confirms the customer is liable to pay and paying Class 1 or Class 2 NI contributions

  • process the claim to status ‘Award Issued’. For how to do this, use TCM1000135
    Note: You must access ‘Amend Application Corrections’ following the process at Step 10.
  • update the manual file with the action you have taken
  • go to Step 13.

Step 12

On the ‘Manage Verification Failures’ screen

  • select the relevant verification failure
  • select ‘Change Verification’. You will be taken to ‘Change of Status Reason’ screen.

If you are changing the verification status of a rule 2 verification failure

  • update the ‘Reason’ field with the message II46 from TCM0160040
  • select ‘OK’. You will be taken back to the ‘Manage Verification Failures’ screen
    Note: There may be more than one rule 2 verification failure. Before continuing, you will need to repeat the action you have taken so far in this step for each rule 2 verification failure.
  • select ‘OK’
  • when the message ‘This will re-submit the application for processing and saving changes made on this window. Do you want to proceed?’ displays, select ‘Yes’
  • you have processed a WTC upfront complex case with a rule 2 verification failure
  • go to Step 13.

If you are changing the verification status of a rule 12 verification failure

  • update the ‘Reason’ field with the message II44 from TCM0160040
  • select ‘OK’. You will be taken back to the ‘Manage Verification Failures’ screen
  • select ‘OK’
  • when the message ‘This will re-submit the application for processing and saving changes made on this window. Do you want to proceed?’ displays, select ‘Yes’
  • you have processed a WTC upfront complex case with a verification failure
  • go to Step 13.

Step 13

Check if the status of the claim is now ‘Award Issued’. For how to do this, use TCM1000118.

If the status is ‘Award Issued’, go to Step 14.

If the status is not ‘Award Issued’ and there is a rule 2 verification failure go back to Step 12.

If the status is not ‘Award Issued’ and there is no rule 2 verification failure

  • before you continue, follow the guidance in TCM0138020
    then, if you can continue to follow this guidance
  • process any verification failures. Follow the appropriate guidance in TCM0076000, TCM0078000 or TCM0080000
    Note: When setting a reminder cycle you must ensure the customer is given a minimum of 30 days in total to respond to your enquiries.
  • go to Step 14.

Step 14

Note: The tax credits computer can take up to 48 hours for the status of the claim to change to ‘Award Issued’. During this time, you must check regularly to determine if the claim status has changed.

Note: Do not refer the case to your TALLO without first allowing 48 hours for the status of the claim to change to ‘Award Issued’.

Check if the status of the claim is now ‘Award Issued’. For how to do this, use TCM1000118.

If the status of the claim is ‘Award Issued’, go to Step 15.

If the status of the claim is not ‘Award Issued’, contact your TALLO for advice on what to do.

Step 15

Check the manual file to determine if the customers have provided details of a bank account.

If either customer has provided details of a bank account, go to Step 16.

If neither customer has provided details of a bank account

Step 16

Note: You must complete Step 16 to Step 18 in their entirety at the same time to avoid any system generated payments and forms being issued to the customer.

  • set the ‘Complex Case’ and ‘Manual Correspondence’ markers. For how to do this, use TCM1000136
  • complete the ‘Amend Finish’ screen. For how to do this, use TCM1000032
    Note: The ‘Complex Case’ and ‘Manual Correspondence’ markers will not be set until you complete the ‘Amend Finish’ screen.
  • go to Step 17.

Step 17

Select the case you are working from the ‘Unprocessed Changes of Circs’ work list with ‘COC’ in the ‘Change Details’ column. For how to do this, use TCM1000208

Step 18

Note: Do not apply the Free Format note where there is a reported change of circumstances that is also on the Free Format note or another ‘Unprocessed Changes of Circs’ work list item with a reason other than ‘COC’. Contact your TALLO for advice on what to do.

Apply the ‘Free Format’. For how to do this, use TCM1000233

Note: You may need to repeat this step as there may be more than one ‘Free Format’ which has generated an ‘Unprocessed Changes of Circs’ work list item with the reason ‘COC’.

Step 19

Note: When you have applied the ‘Free Format’, you will be taken back to the ‘Maintain Worklist’ screen.

Check if the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column has been deleted. For how to do this, use TCM1000208.

If the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column has been deleted, go to Step 20.

If the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column has not been deleted

  • delete the ‘Unprocessed Changes of Circs’ work list item with ‘COC’ in the ‘Change Details’ column. For how to do this, use TCM1000160
  • go to Step 20.

Step 20

Check if an award version has been created which has a payment schedule. For how to do this, use TCM1000373

Note: The tax credits computer can take up to 48 hours for the payment schedule to be set up. During this time you must check regularly to determine if a payment schedule has been set up.

If an award version has been created that has a payment schedule set up

  • make a note of any payments that have been issued. For how to do this, use TCM1000312
  • go to Step 21.

If an award version has been created that has not had a payment schedule set up,refer to TAL.

Note: The tax credits computer can take up to 48 hours for the payment schedule to be set up. During this time you will need to check regularly to determine if a payment schedule has been set up.

Step 21

  • suspend the payments. For how to do this, use TCM1000232
    Note: This will create a ‘Suspended Payments (Payments)’ work list item.
    Note: The payments must be suspended for each customer.
  • transfer the ‘Suspended Payments (Payments)’ work list item to your MU. For how to do this, use TCM1000023
  • set an action date of 180 days in the future on the ‘Suspended Payments (Payments)’ work list item. For how to do this, use TCM1000008
  • update the manual file with the action you have taken
  • update Household Notes with the message II54 from TCM0160040. For how to do this, use TCM1000001
  • go to Step 22.

Step 22

Check if any payments have been made to the customer. For how to do this, use TCM1000312.

If payments have not been made to the customer, go to Step 24.

If BACS payments have been issued to the customer

  • contact the Bank Liaison Team to recall the payments. For how to do this, use TCM1000134
  • go to Step 23.

Step 23

If the BACS payments could not be recalled

  • make a note of the net amount paid on form TC648. For how to do this, use TCM1000312
  • go to Step 24.

If the BACS payments have been recalled, go to Step 24.

Step 24

  • complete the appropriate payment details forms and pass them to your manager for checking
    Note: You will need to complete a ‘Manual Calculation Sheet’ for each tax year you have calculated WTC entitlement for.
    Note: If the customer has already received payments for the award period, make sure you adjust the yearly award by the amount of payments already issued.
  • go to Step 25.

Step 25

Once the appropriate payment details forms have been passed as correct by your manager, go to Step 26.

Step 26

Check the TC648.

If you are returning to this guidance following the return of an enquiry about CTC, go to Step 27.

If the customer is not liable to pay and paying either Class 1 or Class 2 NI contributions, go to Step 28.

If the customer is liable to pay and is paying either Class 1 or Class 2 NI contributions

Using the information on the form TC648 and ‘Manual Calculation Sheet’, complete a TC602 manual award notice for the WTC award. For how to do this, use TCM1000275

Note: The TC602 manual award notice will also inform the customer that CTC enquiries are ongoing with the EU Member State and entitlement to CTC can not be calculated until we receive a response to our enquiries.

Note: Where the period from the start date of the claim to today’s date has passed 5 April, you will need to issue a TC602 manual award notice for each tax year.

  • For migrant workers, issue one TC602 manual award notice to the customer who lives and works in the UK
  • For cross border workers, issue one TC602 manual award notice to the customer(s) who works in the UK but lives in the EU Member State; if the customers live in the UK, one award notice will be sent for a joint claim
  • update Household Notes with the message II35 from TCM0160040. Make sure you select the ‘Retained’ checkbox. For how to do this, use TCM1000001
  • update Household Notes with the message II52 from TCM0160040. For how to do this, use TCM1000001
  • send the appropriate payment details forms to the Manual Payments Team
  • go to Step 27.

Step 27

Check the information on the form TC648.

If you are waiting for the return of information you have requested from the customer

  • BF the manual file and maintain the BF run
  • follow the guidance in TCM0288580.

If the only information you are waiting for is the return of the E400 series forms from the EU Member State

  • BF the manual file and maintain the BF run
  • follow the guidance in TCM0288540.

If the E400 series forms have been returned by the EU Member State and the customer has provided you with all the information you have requested, follow the guidance in TCM0288540.

Step 28

  • using the information on the form TC648 and ‘Manual Calculation Sheet’, complete a TC602 manual award notice for the WTC award. For how to do this, use TCM1000275
    Note: The TC602 manual award notice will also inform the customer that CTC enquiries are ongoing with the EU Member State and entitlement to CTC can’t be calculated until we receive a response to our enquiries.
    Note: Where the period from the start date of the claim to today’s date has passed 5 April, you will need to issue a TC602 manual award notice for each tax year.
  • issue one TC602 manual award notice to the customer who lives and works in the UK
  • access SEES and complete and issue TC1116 to customers working in the UK
  • update Household Notes with the message II35 from TCM0160040. Make sure you select the ‘Retained’ checkbox. For how to do this, use TCM1000001
  • update Household Notes with the message II75 from TCM0160040. For how to do this, use TCM1000001
  • send the appropriate payment details forms to the Manual Payments Team
  • take no further action.