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HMRC internal manual

Tax Credits Manual

Changes - customer: Family break-up

Checklist

Before you follow this guidance make sure

  • you follow the guidance in TCM0138020
    Note: When following TCM0138020 you must ensure you follow TCM0134480 and TCM0134420 when told to.
  • you follow the guidance in TCM0284140
  • you have the correct user roles to follow this guidance
  • you are in the correct MU. Use TCM0322460 for the correct MU number.

Reasons not to follow this guidance

You do not need to follow this guidance

  • if there has been a death of a customer. Follow the guidance in TCM0040060
  • if the family break up is during the renewals period. Follow the guidance in TCM0258080.

Background

Note: Before making any changes, you must follow the guidance in TCM0042260.

If there is a household break-up during the period of the award to tax credits, the award must end. Notification of a household break-up can be received in a number of ways

  • by phone
  • face-to-face
  • paper.

An award may need to be ended in this way for the following reasons

  • death of a customer. Follow the guidance in TCM0040060
  • one customer in a two-customer family leaves
  • one customer informs you that they have moved address and has not mentioned the second customer, which would need investigating
  • a single customer marries, becomes part of a civil partnership or starts to live with someone as if they were married or in a civil partnership
  • a married or civil partnership couple break up either by a court order or in circumstances which are likely to become permanent and they still live in the same household.
    Note: The Marriage (same sex couples) Act 2013 extended marriage to same sex couples.  See TCTM06100 for the definition of a couple.

If the customer supplies a new address for an ex-partner when reporting a family break-up, a letter will be issued to the ex-partner at the address supplied to confirm the address given.

Family Break Up Notified Late

From 18 January 2010 there has been a change in policy for people who start living together or separate, and who report changes late.

HM Revenue & Customs (HMRC) will take into account what they would have been entitled to receive had they reported the change promptly.

Where the customer has taken more than 31 days to report a change in their household, we will look at the period from when the household ended to the day before their new effective date of claim and calculate

  • how much they would have been entitled to if they had reported the change promptly
    and
  • offset this amount against their old tax credits award to reduce their overpayment. This is called Notional Entitlement.

The maximum period for notional entitlement will be from the date of the household break-up to the date the customer notified us. The notional entitlement period cannot extend beyond the date the household break-up was reported.

Guidance

Step 1

Note: If the claim you are working is pre-award then you do not need to look for an Unprocessed Change of Circumstances work item as these will only be shown on post award claims.

Check on the Tax Credits computer to determine if there are any ‘Unprocessed Change of Circumstances’ work items to process. For how to do this, use TCM1000142.

If there are any ‘Unprocessed Change of Circumstances’ work list items shown to process

Note: If the ‘Unprocessed Change of Circumstances’ work list item is the same as the change you have been notified of, delete the work list item and carry on following this guidance for the change you have been notified of.

  • process the work list item. For how to do this, use TCM0054060
    Note: If you need to contact the customer for any missing information, make sure you request the information for all of the potential changes at the same time if possible.
  • go to Step 2.

If there are not any ‘Unprocessed Change of Circumstances’ work list item shown to process, go to Step 2.

Step 2

Note: If the customer has previously had a joint claim and now has a new claim or intends to make a new claim, personal information from up to the date of the end of the joint claim will be issued to both customers during the renewal period.

If the customer has indicated in the correspondence that this may put them at risk of domestic violence

  • set the ‘Manual Correspondence’ marker. For how to do this, use TCM1000063
  • action the household breakdown, if applicable
  • set the retained ‘Domestic Violence’ household note. For how to do this, use TCM0154040

If the customer has not indicated in the correspondence that they are at risk of domestic violence

  • and you are dealing with a returned TC821, go to Step 3
  • have followed the normal reminder cycle and have still not received a completed TC821, go to Step 4
  • have followed the normal reminder cycle for questions about the household breakdown and still not received a reply, go to Step 13
  • can continue with the case because none of the above apply and the reported household breakdown is in respect of a single customer, go to Step 5
  • can continue with the case because none of the above apply and the reported household breakdown is in respect of a joint claim, go to Step 6.

Step 3

Use the information provided on the TC821

  • to update the ex-partners address. For how to do this, use TCM0036020
  • issue form TC1213 to the ex-partner to the address they have provided, go to Step 16.

Step 4

If you have not received a completed reply to the TC821 and do not have the ex-partners current address

  • mark the ex-partners address RLS. For how to do this, use TCM1000031
  • go to Step 14.

Step 5

Check that you have all the information needed to end the single household. Make sure you have details of

  • household end date
  • customer’s current address
  • full details of any other changes to the claim the have told us about.

If you have all the information you need, go to Step 9

If you do not have all the information you need, go to Step 8.

Step 6

Check that you have all the information needed to end a joint household. Make sure you have details of

  • household end date
  • customer’s current address
  • ex-partner’s current address.
     

Note: Address information provided by the ex-partner can be accepted. If the ex-partner has recently contacted us to provide new address details do not overwrite these details.

Note: If the customer does not know the ex-partners address do not ask them to find it out.

Note: If the customer has previously had a joint claim and now has a new claim or intends to make a new claim, personal information from up to the date of the end of the joint claim will be issued to both customers during the renewals period.

If the customer has not indicated in the correspondence that this may put them at risk of domestic violence, go to Step 7.

If the customer has indicated in the correspondence that this may put them at risk of domestic violence,

  • set the ‘Manual Correspondence’ marker. For how to do this use TCM1000063
  • action the household breakdown. For how to do this use TCM1000222
  • set the retained ‘Domestic Violence’ household note. For how to do this use TCM0154040
  • go to Step 7.

Step 7

Check you have all of the information for any other changes the customer has provided

If you have all the information you need, go to Step 9.

If you do not have all the information you need, go to Step 8.

Step 8

Contact the customer to obtain the missing information you need. For how to do this, use TCM0094080.

Note: If you are contacting the customer make sure you ask for the missing information for all changes.

If you obtain the missing information you need, go to Step 8.

If you do not obtain the missing information you need, go to Step 12.

Note: If the only information you still need is the date of the family break-up and, after the normal reminder cycle has expired you still have not received a response, you must use the date the customer informed HMRC of the change as the date of the family break-up.

Step 9

Use Function ‘Amend Application’ choosing the ‘Change of Circumstances’ option to check for any changes previously reported

If the claim on which the household breakdown is reported is still at pre-award stage

  • you will be presented with the ‘Free Format’ screen
  • check the details already entered, if applicable and enter any new information you have obtained from the customer including the household end date and the reason for the household end
  • go to Step 15.

If the claim on which the household breakdown is reported is at post award stage

  • go to the ‘Applicant Details’ screen where the ‘Signals’ screen will automatically display
  • select ‘OK’ in the ‘Signals’ screen. The ‘Signals’ screen will disappear and you will be taken back to the ‘Applicant Details’ screen
  • select ‘View’ on the toolbar menu
    Note: If you can select ‘Apply Free Format’ from the options available. You will be taken to the ‘Apply Free Format’ screen
  • make a note of the details held in the ‘Change Details’ box go to Step 10.

If you can not select ‘Apply Free Format’ from the options available, go to Step 10.

Step 10

Enter all the information you obtained from the customer or from the ‘Apply Free Format’ screen. Follow the relevant Changes guidance.

If you have not been given the ex partner’s current address or you have only obtained a partial address, go to Step 11

Note: If this is a joint claim update the ex partner’s current address if you can, unless it is clear that the ex partner has already updated their details since the household breakdown.

If this is a single claim, go to Step 12

If you have entered all of the changes that the guidance in TCM0042260 allows you to make, go to Step 12.

Step 11

If you do not have the ex-partner’s current address or you only have a partial address, go to the appropriate ‘Applicant Details’ screen

Note: If customer 1 is reporting the change, the partner will be customer 2.

  • mark the ex-partners address RLS. For how to do this, use TCM1000031
  • go to Step 12.

Step 12

On the ‘Applicant Details’ screen, select ‘View’ on the toolbar menu

If ‘Apply Free Format’ is available

  • select it from the options available. You will be taken to the ‘Apply Free Format’ screen
  • review the details entered and make sure that you have applied all of the changes that the guidance in TCM0042260 allows you to make
    • where you have not applied all of the changes that the guidance in TCM0042260 allows you to make, go back to Step 10
    • where you have applied all of the above changes
    • select ‘Applied’
    • when a warning message displays, select ‘Yes’
    • go to Step 13.

If ‘Apply Free Format’ is not available, go to Step 13.

Step 13

Go to the ‘Household Details’ screen

  • enter the household end date in the ‘Household End Date’ field
    Note: If you have not got the exact date and you have exhausted the normal reminder cycle, use the date the customer informed HMRC of the change.
  • select ‘Household breakdown’ from the ‘Household End Reason’ drop down menu
  • select ‘OK’. You will be taken to the ‘Amend Finish’ screen
  • go to Step 14.

Step 14

On the ‘Amend Finish’ screen

  • enter the date the notification of the change was received
  • enter the source of the change
  • enter the reason for the change
  • select ‘OK’. The computer will now automatically accept the change and will apply the change at the effective date
    Note: The changes you have made in this function will not be applied until you complete the ‘Amend Finish’ screen and select ‘OK’.
    Note: If the message ‘S18 Refinalisation Rules - Potential inappropriate refinalisation for CCYY-CCYY. If you have the authority to re-finalise under S19, S20 or S21 of the Tax Credit Act 2002 or due to an appeal decision. Select ‘OK’ to process the change or ‘Cancel’’ displays. Use the guidance in TCM0042260 before making any changes.
  • select ‘OK’ on the message

If you have not altered the ex-partner’s address or marked it RLS, go to Step 15.

If there is no ex-partner because you are working a household breakdown on a single claim, go to Step 15.

If you have altered the ex-partner’s address, go to Step 17.

Step 15

Check NTC to see if a new claim for Tax Credits has been made

If a new claim to Tax Credits has not been made, go to Step 16.

If a new claim for Tax Credits has been made and you have not altered the ex-partners address or marked it RLS go to the appropriate ‘Applicant Details’ screen.

Note: If customer 1 is reporting the change, the partner will be customer 2.

  • select ‘Address’. You will be taken to the ‘Address Change’ screen
  • select the ‘RLS’ checkbox
  • select ‘OK’
  • when the warning message displays, select ‘No’

Check the date the customer reported the change in their household circumstances. If the customer reported the change

  • more than 31 days after the household breakdown (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Update ‘Household Notes’ with the message NL10 from TCM0164020. For how to do this, use TCM1000001.

Note: You must use the guidance in TCM0152060 when you record the note and also use the guidance in TCM0152160.

Step 16

Follow the guidance in TCM0044080 to invite a fresh claim.

Note: Before you can invite a fresh claim, you must check whether the household is in a closed postcode area to prevent new claims being issued to working age households in these areas.  The exception to this is for those households that contain either an individual of Pension Credit Qualifying Age (PCQA) or customers who are claiming for more than two children, as these will be allowed to claim tax credits. For how to do this, use TCM0044080

Contact the customer. For how to do this, use TCM0094080.

  • tell them that they may still be eligible for tax credits. Our Helpline can check this for them and send out a claim form so they can make a claim in respect of their new circumstances, if they have not already made one
    and, if they do make a claim
  • ask them to attach a note to the back of the claim form requesting backdating to the day after their previous claim ended. Remind them that we can only backdate up to a maximum of 31 days

For how to do this, use TCM0044080

Note: If you can not contact the customer by phone send them a TC1213 letter with the above advice.

If the claim is Pre Award

  • take no further action.

If the claim is Post Award

  • update ‘Household Notes’ with the message NL03 from TCM0164020.  For how to do this, use TCM1000001.
    Note: You must use the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152160.
  • close the document on DMS. For how to do this, use TCM1000037
  • take no further action.

Step 17

Complete form TC821 (Word version) asking the ex-partner to confirm their details and send it to them at the address that has been entered in Household Notes

Note: Use the Word document TC821 to issue to the ex-partner. Do not use LFC TC821 as this will show the customer’s details.

Note: Follow the normal reminder cycle if the initial form TC821 is not returned.

  • update ‘Household Notes’ with the message NL07 from TCM0164020.  For how to do this, use TCM1000001.
    Note: You must use the guidance in TCM0152060 when you record the note and also use the guidance in TCM0152160.
  • take no further action.