§ Mr. MacShaneTo ask the Chancellor of the Exchequer if he will make a statement on the treatment of maintenance payments for income tax, working family tax credit and disabled tax credit purposes. [81725]
§ Dawn PrimaroloRecipients of payments under maintenance arrangements set up on or after 15 March 1988 are not taxable on the payments they receive.
There are different rules for those with maintenance arrangements set up before 15 March 1988. Recipients are taxable on the payments they receive, save that a former 344W wife or husband is not taxable on the first slice of payments up to the level of the married couple's allowance.
From 6 April 2000, people receiving payments under pre 15 March 1988 arrangements will no longer be taxable on them.
For WFTC and DPTC, maintenance payments received by an applicant will be fully disregarded for the purposes of calculating their income in assessing entitlement to WFTC and DPTC.