Tax Credits Act 2002 Schedule 3 paragraph 25

Incapacity benefit: linking rules for people leaving qualifying remunerative work

Paragraph 25 of Schedule 3 amends section 30C of the Social Security Contributions and Benefits Act 1992 to update the rules that allow certain days to count as days of incapacity for work, linking them to entitlement to tax credits under the Tax Credits Act 2002.

• Where a person stops qualifying remunerative work (as defined in Part 1 of the Tax Credits Act 2002) and claims the higher rate of short-term or long-term incapacity benefit, certain earlier days may be treated as days of incapacity for work.
• The linking rule applies if the day after leaving work was a day of incapacity, the person was entitled to the higher rate of short-term or long-term incapacity benefit within the previous two years, and they met the relevant tax credit conditions on the day before they stopped work.
• The relevant tax credit conditions are met on a day if the person is entitled to the disability element of working tax credit (whether claiming alone or jointly), or would be entitled but for their income being too high.
• Additionally, either working tax credit or any element of child tax credit other than the family element must actually be paid in respect of that day on such a claim.