§ Mr. WebbTo ask the Chancellor of the Exchequer whether payments of child tax credit in April 2003 will be based on earnings data from 2001–02; whether payments of child tax credit will be adjusted during 2003–04 when final earnings data for 2002–03 becomes available; whether amounts of child tax credit payable for 2003–04 will be adjusted after the end of 2003–04 when final earnings data for 2003–04 becomes available; and if he will make a statement. [97843]
§ Dawn Primarolo[holding answer 13 February 2003]: Tax credit awards for 2003–04 are initially based on income for the tax year 2001–02, the last complete tax year for which people will have details of their income already available. Awards will be adjusted to reflect income for the tax year 2003–04 if that is lower or significantly higher than 2001–02 income (only rises of more than £2,500 are taken into account). Once their initial award is made, claimants can ask to have their tax credits payments based on their expected income for 2003–04.
After the first year, tax credits will initially be based on income for the previous tax year and adjusted to reflect current tax year income if that is lower or significantly higher.